Kanyisa Mkhize, Chief Executive at Sanlam Corporate

South Africa’s retirement system is under pressure – not only from economic strain but from a widespread lack of access, understanding and early intervention. According to the 2025 Sanlam Benchmark Survey – the 44th edition of South Africa’s most comprehensive retirement fund industry research – financial literacy gaps could quietly cost the country millions in lost savings, missed opportunities and poor long-term outcomes. Nearly 50% of those surveyed called for retirement education from as early as school age.

As South Africa’s population ages and the pressures of modern work life intensify, the research underscores the urgent need for a holistic approach to employee health and retirement well-being. The findings reveal that addressing both financial and mental stress is critical to ensuring long-term health and economic security for South Africans. The 2025 research spanned interviews with over 70 stand-alone funds, 168 participating employers in umbrella funds (up from 100 in 2024), and over 500 consumers.

Key findings:

• Only 42% of retirement fund members believe they’re on track to save enough for retirement.
• 43% think they’ll maintain their current standard of living in retirement.
• In contrast, six in 10 funds say members won’t be able to retire comfortably by age 64.
• Fewer than 40% of employer funds allow continued membership after retirement.
• Nearly half (49%) of members are unaware of the post-retirement options available to them.
• 92% are aware of the Two-Pot system, but only 49% feel confident about their knowledge and understanding of the impact of accessing these savings.
• 44% of those who withdrew from the emergency savings pot used the funds to pay off debt.
• 64% say regular financial education is very important, yet only 11% were provided access to a financial adviser through their employer fund when they withdrew from the fund, and nearly 50% rely on Google for financial advice.
• 68% feel confident about understanding their medical aid benefits, yet only 47% feel the same way about their risk benefits.
• The number of employer funds offering critical illness benefits increased from 5% in 2019 to 33% in 2025, while umbrella fund participants providing these benefits jumped from 8% in 2019 to 49% in 2025.

Financial stress impacts productivity and affects employee health. This has major implications and knock on consequences for individuals, their families, and for society and the economy. This underscores the need for financial literacy and advice.

Kanyisa Mkhize, Chief Executive at Sanlam Corporate, says, “We’re seeing people make life-altering financial decisions without the information, support or advice they need. But the right intervention at the right moment can shift outcomes. The opportunity is there – we just need to scale it.”

Amid the less positive survey findings, there are also encouraging signs of progress. Engagement is rising, awareness is growing, and targeted education is starting to shift behaviours. “The challenge now is sustaining this momentum – and ensuring it delivers real, measurable improvement,” Mkhize adds.

The cost of what we don’t know

The cost of poor financial literacy is significant. Just 42% of members believe they’re saving enough to retire, and only 43% of consumers say they are confident they’ll maintain their standard of living. More than half (51%) worry they won’t be able to leave a legacy.

System-wide, the picture is equally troubling: six in 10 funds say their members won’t retire with enough – by the average retirement age of 64 – to maintain their standard of living. Only four in 10 believe that the average retirement age (64) is still sufficient for financial security. And fewer than 40% of employer funds allow continued membership after retirement, forcing members to navigate a complex financial environment just when they need clarity and support. Only 23% of employer funds offer critical illness benefits. And just two in 10 tailor their annuity strategies for different types of members – highlighting a need for more personalised, fit-for-purpose planning.

Where the gaps begin

The survey data shows that understanding – or the lack of it – drives behaviour. 49% of members are unaware of their pension options at retirement and one in 5 consumers say they haven’t engaged with their benefits because they “don’t know enough about retirement planning”, Yet most consumers also believe they will have saved enough to retire comfortably by the age of 58. Conversely, Sanlam Corporate’s internal data shows the age at which most South Africans can afford to retire comfortably is closer to 80. This shows the critical need for financial literacy to empower people with the right information to make informed decisions.

Most people only seek advice within nine years of retirement – for many, at this point there isn’t enough time to make adjustments that will have a significant impact on their retirement outcomes. “You cannot act on what you don’t understand,” says Nzwa Shoniwa, Managing Executive: Sanlam Umbrella Solutions. “And right now, the cost of that lack of understanding is being carried by individuals, families, and the economy.”

Who is falling behind?

The financial literacy gap doesn’t affect all South Africans equally, and some groups are falling behind in ways that could impact their long-term health and retirement outcomes. Women face particular vulnerabilities – only 38% believe they’ll maintain their lifestyle in retirement (vs. 62% of men). Women are generally less confident about their understanding of retirement benefits, with only 39% reporting confidence about their benefits compared to 61% of men. This gap extends to other areas including risk benefits, financial advice, value added benefits like rewards, medical aid, gap cover, primary health insurance, employee assistance programmes, and even understanding the financial impact of withdrawing from the emergency savings pot.

Young adults are also at risk. For many starting their careers (typically between ages 24 and 30), joining a medical aid is often a condition of employment. Just 17% of those under 30 are covered by an employer medical scheme, while 18% receive cash as part of their salary to purchase their own product. However, the complexity and cost of available products can lead to underinsurance, opting out or delayed long-term planning. This group, especially those aged 31- 40, is also the most likely to cite rising living costs as a barrier to long-term planning.  Compounding these decisions, many only start saving for the long term in their 40s.

These factors call for more inclusive, age-sensitive education and health strategies to enable financial confidence. With only 68% of members feeling confident in understanding their medical aid benefits, the data reinforces the importance of simplified, transparent healthcare solutions. Earlier this year, Sanlam announced a partnership with Fedhealth to be its exclusive open-scheme medical aid provider. A move that supports the Sanlam Group strategy to provide a complete health offering as part of its overall financial services value proposition. “This partnership is about more than business – it’s about making a meaningful difference in the lives of all South Africans,” says Mkhize.

In October, Fedhealth is set to launch a next-generation medical aid solution – designed to be simpler, more transparent, and better aligned with the needs of modern members. “This rebooted offering will prioritise affordability, flexibility, and digital engagement, making it easier for members to understand and manage their healthcare benefits,” adds Mkhize.

South Africans want to know more

The appetite for better financial guidance is strong: 64% of members say regular financial education is very important. Nearly half of employer funds support retirement planning in schools. And 49% of employer funds – rising to 58% of umbrella funds – believe targeted communication could improve outcomes. There is momentum. Nearly 60% of members reviewed their benefits in the past year – likely prompted by the introduction of the Two-Pot system. As a result, 66% know the value of their savings, and 59% understand how their investments are allocated. “We’re seeing growing engagement,” says Shoniwa. “But to truly close the gap, we need to embed education more consistently, from the classroom to the payslip.”

Closing the gap: A shared responsibility

The 2025 Benchmark theme, “Age of Confidence”, underscores a core truth: no single player can fix the system. It requires aligned action from government, employers, advisers, and administrators. Employers are uniquely placed to support members early. Guidance from the first payslip – particularly around group risk and preservation – can make a lasting difference. “Employers and HR teams can be powerful allies in building financial confidence,” says Shoniwa. “By working alongside advisers and administrators, they can help make retirement real and achievable.”

Administrators must do more than communicate. They must deliver seamless advice, access, and behaviour-linked incentives, and funds need to outperform and align with members’ long-term goals – including net replacement ratios. The Sanlam Umbrella Fund is doing just that.

The 2025 Sanlam Benchmark data is more than a call to action – it’s a roadmap. South Africans want better outcomes. They’re ready to engage. What they need now is consistent education, clearer communication, and simpler systems. “What we don’t know is already costing us,” concludes Mkhize. “But what we choose to teach – and how we teach it together – could change everything. Financial literacy is the foundation for a system that delivers not just outcomes, but dignity.”

ENDS