The two-pot savings scheme offers retiring South African expats one big advantage over regular citizens. Retiring South African expats are able to access their two-pot savings immediately, thereby sidestepping the three-year lock-in rule.
As we’ve already reported, ever since the two-pot retirement system was introduced back in September 2024, fund member have withdrawn billions in funds. This is despite financial advisors decrying the long-term effects of saving efficacy. The scheme allows members to make one withdrawal from their savings pot every single year. Many are making lumpsum withdrawals to simply make ends meet or pay off debts. Which are clear signs of financial strain …
RETIRING SOUTH AFRICAN EXPATS
Nevertheless, retiring South African expats are not subject to the same restrictive three-year lock-in rules that govern the savings portion of regular residents. Expats who have formally ceased tax residency can access their retirement savings without delay.
As such, the Retirement Matters Committee of the Actuarial Society of South Africa (ASSA) reports that 75% of applications in Q2 of 2025 were repeat claims. Up until February 2025, 2.6-million South Africans accessed part of their retirement savings. Therefore, it’s plain to see that retiring South African expats are eager to obtain cash as soon as possible after ceasing tax residency.
LUMPSUM PAYOUTS
Furthermore, the South African Revenue Service (SARS) says R47 billion has paid to fund members since the scheme’s start on 1 September 2024. In turn, this yielded R12 billion in tax revenue for the government. Surprisingly, this is more than double the R5 billion initially projected by the National Treasury when it introduced the scheme.
However, something retiring South African expats should remember is their withdrawals – while not time limited – are not tax exempt. In fact, administrative withdrawal fees, and cross-border transfer regulations can make such transactions more costly. SARS insists that ‘tax liability remains even after severing ties with the country.’
DO YOU THINK EXPATS SHOULD STILL BE TAXED AFTER RETIREMENT?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1.
Subscribe to The South African website’s newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
