Global Courant
New data from FNB showed that an alarming number of South Africans plan to work past retirement age due to a lack of retirement savings.
FNB Retirement Insights Survey collected views from approximately 1,000 respondents between January 13 and February 23, 2023 with the aim of uncovering customers’ perceived willingness to retire.
The bank found that 89% of those surveyed plan to continue working or work part-time due to a lack of retirement savings.
Bheki Mkhize, the CEO of FNB Wealth and Investments, said: “Gone are the days of a smooth runway leading to retirement, where a single job provided a pension fund up to age 65 and a guaranteed income for life.”
The bank reported that 44% of lower-income respondents expect to continue working, while a significant percentage of middle-income and affluent participants, 64% and 59% respectively, expect to continue working full-time or reduced hours.
The graph below shows who expects to continue working:
FNB reported that 74% of respondents claim to have a plan in place to help them prepare for retirement. 45% of the respondents indicate that they have an annuity.
“Nevertheless, the findings show that respondents in the first-time, middle-income and emerging wealthy categories are very unlikely to maintain their current lifestyles in retirement.”
“Only respondents who are affluent and wealthy are likely to maintain their current lifestyle when they retire. In addition, it also found that the respondents who have reached retirement age only started saving for retirement at an average age of over 30 years, arguably late according to industry benchmarks,” said FNB.
According to FNB, those currently aged between 18 and 25 believe they will begin saving for retirement at age 36 — marking an even later start.
Respondents in the lower income brackets are not confident that their plan will produce the desired results due to barriers such as age and current financial strains such as the increased cost of living.
“This seems to be borne out by the fact that 39% of respondents who do not currently have a retirement plan will rely on alternative sources of income for their retirement, such as asset sales, family support or government social grants,” said FNB. .
Sizwe Nxedlana, the CEO of FNB Private Segment, said consumers need better education to help them save better for retirement and create a better savings culture in South Africa, even in the face of volatile economic conditions.
Lytania Johnson, CEO of FNB Personal Segment, said it is concerning that statistics indicate that a large proportion of respondents do not plan to retire, saying they may depend on social benefits as part of their retirement .
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