November 2024
20Nov

South Africans Withdraw $1.94 Billion From Pensions

South Africans have withdrawn 35.1 billion rand ($1.94 billion) from retirement funds since new laws came into effect three months ago giving them early access to part of their savings. The figure is higher than the amount the National Treasury forecast savers would tap after the implementation of a so-called two-pot pension system on Sept. 1. South Africa’s central bank has said that a high-withdrawal scenario may help boost the country’s economic growth rate by as much as 0.3 percentage...

November 20, 2024
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04Nov

Pension warning: Britons withdrawing £500 a month face ‘very real threat’ of running out of money in retirement

Britons are warned they could run out of money in retirement if they withdraw £500 a month from their pension. The warning comes from the Retirement Income Market data from the City watchdog, the Financial Conduct Authority (FCA) which showed that well over 220,000 pension pots had a withdrawal rate of more than eight per cent in 2023/24. This surge in high withdrawal rates has raised alarms among financial experts as pension drawdown continues to be the most popular option. Almost 280,000 savers...

November 4, 2024
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October 2024
18Oct

The Impact of Lump-Sum Retirement Withdrawals on Labor Supply: Evidence from Peru

By Carla Moreno & Sita Slavov  We examine the labor supply impact of a 2016 policy that allows retirementeligible individuals covered by Peru’s private pension system to receive retirement benefits as a lump sum rather than as an annuity. We present a theoretical model predicting that, for liquidity constrained workers, the lump sum option makes formal employment (requiring pension participation) more attractive relative to informal employment (not requiring pension participation); it also encourages early retirement. Using household panel data, we...

October 18, 2024
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18Oct

UK. Tax-free withdrawals from pension pots surge amid fears over autumn budget

Savers have started to withdraw cash from their pension pots amid fears over potential tax changes at the autumn budget, according to investment companies. The investment platform AJ Bell said reports that the chancellor, Rachel Reeeves, was likely to increase taxes at the budget on 30 October had spooked some of its customers into new retirement savings decisions. The wealth management firm Quilter, which manages more than £113bn of customers’ money, also said it had experienced a surge in calls from...

October 18, 2024
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September 2024
13Sep

South Africa. Over 63,000 government employees dip into their two-pot retirement funds, says GPAA

The Government Pensions Administration Agency (GPAA) has confirmed that that more than 60,000 public sector employees have made applications to make withdrawals from their savings pot of the two-pot retirement system. According to the GPAA, the Government Employees Pension Fund (GEFP) has received a little under 63,000 two-pot retirement system applications since September 1, 2024. In terms of two-pot retirement system enquiries, the GPAA said it has received a high number of applications from its members, which include teachers, nurses, police officers and other...

September 13, 2024
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August 2024
21Aug

South Africa. Two-pot retirement system: fewer early withdrawals, more financial optimism

While many South Africans who are members of pension funds are counting the days until they can withdraw from their savings pot under the two-pot retirement system, research suggests that fewer people plan to dip into their retirement savings early, probably thanks to financial optimism as the economy improves. According to the 2024 Old Mutual Savings and Investment Monitor that took a deep dive into the two-pot retirement system, the number of working South Africans with retirement savings provision (income...

August 21, 2024
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July 2024
25Jul

The decumulation challenge

As people continue to live and work longer, the challenge of longevity – running out of money too soon into retirement - is hanging over many Canadians’ retirement plans. According to research from CCP Investments, only 45% of Canadians actually have some sort of plan in place for their retirement, with 53% admitting they don’t know how much money they’ll need to retire. Part of this anxiety stems from a change in the last decades in the retirement plan landscape, as...

July 25, 2024
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18Jul

Hong Kongers fleeing to Britain leave $5.1b trapped behind

Emigration has been top of mind for many residents after Hong Kong’s government in March passed Article 23, a domestic security law. For those moving to the UK, not being able to access their pension money has palpable financial impacts. “With Article 23, there will be more people trying to leave Hong Kong, more people trying to get early withdrawals to build their new lives, and more denials,” said Ms Megan Khoo, research and policy adviser at British-based activist group...

July 18, 2024
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June 2024
20Jun

Nigeria. Economic hardship: Workers swoop on their pension contributions

In apparent response to the biting hardship in the economy, the number of workers that made withdrawals from their voluntary contributions under their pension savings increased by 87.6 per cent in the first quarter of 2024, Q1’24. Specifically, the number of workers that withdrew from their voluntary contributions went up to 1,302 in Q1’24, from 694 recorded in the preceding quarter, Q4’23. Also, the value of funds withdrawn from the voluntary contributions increased by 160 per cent to N3.9 billion from...

June 20, 2024
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12Jun

South Africa. Two Pot Retirement System

What is a two-pot retirement? The two-pot retirement system is a reform that will allow retirement fund members to make partial withdrawals from their retirement funds before retirement, while preserving a portion that can only be accessed at retirement to help improve retirement outcomes. This means members need not resign to access part of their retirement benefit if they are in financial distress. This reform will come into effect on 1 September 2024. Who is it meant for? The new system will...

June 12, 2024
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