Sanlam report shows most South Africans will never be able to retire

Sanlam’s latest Benchmark Report has painted a bleak picture of the state of retirement and medical aid savings in SA, with the majority of the population unlikely to ever retire with sufficient financial resources.

The 42nd iteration of the report found that 63% of South Africans were anxious about their finances, while 87% said they felt financial stress.

Of these, 58% indicated that the stress of running out of money during retirement coupled with the risk of facing unexpected financial challenges was affecting their physical and mental health.

The report also found that one in five adults in SA did not have any form of medical aid coverage; moreover, 25% were not members of an employers’ pension or provident fund indicating they have no retirement savings.

As a consequence, one in five consumers believe they may never be able to retire at all, while 42% said they felt a sense of insecurity or lack of control over their financial future.

“These statistics are not entirely surprising, considering that 46% of respondents admitted to struggling to meet basic monthly needs like food and rent,” Sanlam Corporate chief executive Kanyisa Mkhize said.

“Our results suggest that people’s preoccupation with immediate financial priorities leaves them with little capacity or resources to save for the future.”

The report was compiled from interviews with more than 500 full-time employees.

The findings underscore the need for improved financial literacy and comprehensive savings planning to address the financial challenges faced by many employed South Africans.

Among some of the alarming findings in the report is the likelihood that most South Africans will never be able to retire.

While 75% of the more than 500 full-time employed respondents contribute to some form of retirement fund, the remaining 25% do not.

Concerning was that 40% of respondents said that if they were to opt out of their retirement fund, it would be because they needed the money to cover their current financial needs.