South Africans invest in shares for retirement, the bank’s study show

A good move in a country where only 6% will have sufficient savings for retirement

A growing number of South Africans who invest in shares do so for their golden years of retirement.

The Bank’s research shows that 42% of South Africans invest in shares to make money and 27% invest in shares for retirement.

This is a positive move in a country where many surveys still show that only about 6% of South Africans will have sufficient savings for their retirement.

It is a fact that people are living longer and therefore outlive their pension savings, forcing many to depend on government’s social grant system, or on their children whilst others are forced to look for jobs post retirement.

“The growing trend of people investing in equities is commendable as it shows that our people are now building themselves wealth in an asset class that has provided better returns in the past,” says Gusta Binikos, the Head of FNB Share Investing.

Binikos said the latest move was quite significant because it now meant people were being proactive in taking steps to build savings to augment their pension.

History demonstrates that shares, as a long-term investment, have the potential to consistently provide inflation-beating returns – more so than any other major asset class.

Online share trading is the favoured method of acquiring shares.

Share ownership in SA is high in terms of population penetration, even when compared to other developed countries. Between 10-15% of South Africans own shares compared to 21% of the British and 17% of Germans

Of the total value of the JSE only 1% is owned by individuals versus the 99% owned by corporates and institutions. 45% of these individuals own BEE shares and only 1/3 of them own other shares.

FNB last year launched its own innovative online share trading platform.

The bank did what the other banks have not done, by launching two share offerings, one for the experienced investor (Share Investor) and one for the man on the street (Share Builder).

The new Share Builder product targets the man on the street and enables the small investor to buy direct holdings of pre-selected shares and exchange traded funds listed on the Johannesburg Stock Exchange (JSE).

Share Builder reduces the apprehension and risk when selecting shares by offering a simplified choice of shares, thus helping the new investor to get started. In addition, detailed educational information is offered on the FNB website to assist beginners.

Share Builder is the most cost-effective online share trading platform in the market. It requires a minimum opening deposit of R100, with a monthly fee of R17 incl VAT and there’s no minimum investment amount required. All Share Builder orders are traded at the end of every day, hence saving on transaction fees for customers.

Share Builder's transaction fee per trade is 2% of the trade value, with a minimum of R50 per trade excluding VAT. No other costs apply.