Benchmark 2025 confirms urgent need for early financial advice
The sustainability of South Africa’s group risk and retirement system is under threat as old models fail to meet modern health and savings needs. This message crystallised during the launch of Sanlam Benchmark 2025, the 44th edition of South Africa’s most comprehensive retirement fund industry research.
The key metrics seem stuck in time
The 2025 research spanned interviews with 70 standalone funds, 168 participating employers in umbrella funds and over 500 consumers.
Your writer has attended countless of these survey launches over the past decade or so, and can confirm that the key metrics seem stuck in time, especially when it comes to how many people will be able to sustain lifestyles through retirement.
In their press pack accompanying the launch, Sanlam writes: Our retirement system is under pressure, not only from economic strain but from a widespread lack of access, understanding and early intervention. “This year’s ‘Age of Confidence’ theme is not just a reflection of where we are, it is a call to where we must go,” said Temba Mvusi, Chairman of Sanlam Group, during his brief introductory remarks.
“The global economy is under pressure, geopolitical tensions are reshaping alliances, and here at home we are navigating a complex policy environment from the implementation of the two-pot retirement system to the ongoing debate around national health insurance to the government considerations around directing retirement savings towards capital investment in national infrastructure.”
Healthcare a looming retirement issue
Mvusi commended the Sanlam Benchmark for making the aforementioned abstracts more concrete, before highlighting some of the survey’s key findings. For 2025, 59% of consumers raised concerns about access to and affordability of healthcare in old age; 44% said they had to dip into emergency savings just to stay afloat; and many indicated they will need to work well into their 70s or 80s to retire with dignity. To solve this crisis requires coordinated effort from all stakeholders including employees, employers, financial institutions, government, retirement funds and, of course, financial intermediaries.
All stakeholders singled out communication and financial literacy as areas of concern, with nearly half of standalone funds surveyed calling for retirement education from as early as school age. But there is a bigger threat lying in wait. “As our 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 wellbeing,” Sanlam said. “The 2025 survey findings reveal that addressing both financial and mental stress is critical to ensuring long-term health and economic security.”
Healthcare featured prominently during the day-long Benchmark 2025 launch. Dr Richard Friedland, CEO of hospital group, Netcare, criticised the current healthcare system as fundamentally flawed, citing a 550% increase in US healthcare costs over 50 years with only a 12% increase in life expectancy. Meanwhile, in South Africa, chronic diseases among younger people have risen by 190% since 2008. The solution centres around moving from a ‘Medicine 1.0’ to ‘Medicine 3.0’ world, or focusing on personalised, participatory healthcare.
Weaving advice into the retirement fabric
Employee benefits consultants and financial advisers can leverage powerful insights from the latest Benchmark and use these in their ongoing interactions with clients. Among the retirement fund members surveyed, only 42% believed they were on track to save enough for retirement and only 43% were confident that they could maintain their current standard of living in retirement. These concerns were confirmed at the standalone fund level, where six in 10 funds said their members would not be able to retire comfortably by age 64.
Commenting on the latest survey, Nzwa Shoniwa, Managing Executive: Sanlam Corporate Umbrella Solutions, said that collaboration was critical to ensure that education, communication and professional financial advice are woven into the fabric of the retirement system. “The data is clear: education and advice are key to improving retirement outcomes,” he said. It is not clear who should shoulder the burden of educating consumers; but it is clear that there is a massive advice gap across the sector.
Another of the ‘stuck in time’ metrics is that retirement fund members have limited access to financial advice. According to Sanlam, only 11% of those surveyed were provided access to a financial adviser through their employer fund when they withdrew from the fund, while nearly 50% rely on Google for financial advice. This prompted Kanyisa Mkhize, Chief Executive at Sanlam Corporate to comment: “We are seeing people make life-altering financial decisions without the information, support or advice they need.”
Some unexpected two-pots spin-offs
The September 2024 implementation of the two-pots retirement solution proved to be a great platform for testing retirement fund communication versus education outcomes. An impressive 92% of survey respondents were aware of the two-pot system, but only 49% felt confident about their knowledge and understanding of the impact of accessing these savings. Put differently, the basic message is hitting home, but the detailed understanding necessary to inform complex decision making and appreciate the long-term impact of these decisions is absent.
Two-pots also saw retirement fund members take a more active interest in their benefits. Per the survey, 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 are seeing growing engagement,” said Shoniwa. “But to truly close the gap, we need to embed education more consistently, from the classroom to the payslip.”
The survey data suggests that consumers’ understanding, or the lack of it, drives behaviour. For example, while most consumers believe they will have saved enough to retire comfortably by the age of 58, 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 advice and financial literacy to empower people with the right information to make decisions, a prospect that the cohort of local financial advisers should relish.
Advice access: going nowhere slowly
This turns into another of those ‘going nowhere slowly’ metrics. The latest survey shows that most retirement fund members only seek advice within nine years of retirement; but this is far too late to make adjustments that will have a meaningful impact on their retirement outcomes.
“You cannot act on what you do not understand,” said Shoniwa. “And right now, the cost of that lack of understanding is being carried by individuals, families and the economy.” Even so, the appetite for better financial guidance is strong. Benchmark 2025 shows that 64% of fund members feel regular financial education is very important while 49% of employer funds, rising to 58% of umbrella funds, believe targeted communication could improve retirement outcomes.
Benchmark 2025 recognises that no single player can fix the system. Although all stakeholders must do their part, Sanlam believes employers are uniquely placed to support members from an early stage. They say that 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; by working alongside advisers and administrators, they can help make retirement real and achievable,” Shoniwa said.
Financial institutions must play a role too
Financial giants like Sanlam have a big role to play. “Our impact is not measured in numbers alone; it is measured in lives changed, futures secured, and dignity restored,” said Mvusi. “”That is why sustainability is not a side project at Sanlam, it is central to our strategy.” He flagged youth unemployment as one of the most urgent challenges facing South Africa. “We must do more to create pathways to opportunity; to equip young people with the skills and support they need to thrive, and to ensure that economic growth is not only inclusive, but intergenerational,” he concluded.
Writer’s thoughts:
The Sanlam Benchmark 2025 survey confirms a growing appetite among retirement savers for financial advice and education. Are advisers doing enough to meet this need? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
