None of us believe exploiting the vulnerable is a good idea, writes Sino Booi, Product Development Lead at Momentum Savings.
The picture in retirement annuity brochures often show older people having abundant fun – whether on a beach, at a scenic picnic or content with a small grandchild on their lap.
This is not the reality for many South Africans.
The Credit Stress Report 2025 Q4published on 3 March 2026 focuses on consumer credit behaviour. In its section on retirees, it shows 1,5 million retirees used credit during last year. In the last quarter of the year, they opened 233 000 new loans, with 70% being personal loans. The report concludes that it means retirees are using credit for more immediate needs such as living expenses. It also points out that overdue balances rose by 18% over the course of the year. And the total outstanding loan amount? A whopping R217 billion.
This is not a romantic picture.
With recent reports on the spike of two-pot withdrawals, the outlook gets bleaker still.
Daily Maverick reported on 22 March 2026 that Alexforbes recorded more than 140 000 claims during the first week of March alone. Momentum Corporate said that of the claims submitted since 1 March 2026, 5% were claiming for the first time, 33% for the second and 62% for the third time.
South Africans are in financial distress, or are some of us seeing our retirement savings as a convenient purse for luxury expenses?
It is our duty as an industry to point out to people that longevity statistics show our generation will live much longer due to medical advances and preventative healthcare. Most of our careers last between 30 and 40 years, and that could easily be our lifespan after retirement, too.
There is only one thing that will enable most of us to rake together enough money for the second of these two stretches of our lives. To, so to speak, gather “two salaries” every month. This is long-term growth, and more specifically the feature of earning compound interest on our savings. To be able to reap what we sow one day, we must sow enough every single month. Relentlessly.
The irony of diving into retirement money is that we’re stealing from our future selves. We’re stealing from our future vulnerable selves who may not be able to be economically active any longer. If that penny doesn’t drop, we will be in even more trouble than the current generation of retirees.
This is why building consistent savings habits and creating financial buffers throughout one’s working years are so important. We must use savings vehicles that allow us to grow our capital over time.
It’s a lovely thought that one day we will be riding a convertible into a sunset, Panama hat or scarf in the wind to cover our thinning hair, but it’s probably not on the cards for a lot of us.
Best is to have a plan. A professional financial adviser can help to work out how much we will need to save now to maintain our current lifestyle and financial independence well into retirement.