2019 retirement reality report reveals dire state of SA retirement landscape

The second 10X Retirement Reality Report (RRR19) reveals the worsening extent of South Africa’s private retirement savings crisis and its pending impact on government resources in the coming years, as well as the savings disparity among racial groups and the massive divide between men and women.

The RRR19 - the findings of a survey of more than 15-million economically active South Africans - indicates that the rising cost of living in the country is preventing 55% of people from making provision for retirement, while 67% of people have made no provision for retirement at all or have little understanding of their existing policy.

The report, commissioned by 10X Investments, reveals a profound lack of understanding among existing clients of the retirement industry regarding what they have actually saved and what they need to have saved.

The poll further highlights some worrying trends across South African demographics:

• 67% of South Africans don’t have any form of retirement plan or have little understanding of their existing policy or investment
• 72% are concerned that they will not have enough money saved to live on after they retire
• Monthly expenses and the rising cost of living is preventing 55% of South Africans from saving towards retirement
• 77% accept that they will need to continue earning an income after they retire
• Statistics that reflect the disparity in retirement savings among different race groups
• 72% of women across all demographics either have no retirement savings plan at all or only have a vague plan.

Founder and CEO of 10X Investments, Steven Nathan says, “South Africa’s retirement time bomb is ticking ever louder than before. Government and consumers alike need to urgently confront this reality, to prevent an even greater proportion of South Africans slipping into poverty in retirement”.

The survey further highlights the gender pay gap in South Africa, where women are understood to earn around a quarter less than their male counterparts, which has a knock-on effect on retirement savings. The report noted that the gender pay disparity is impacting South African women’s capacity to save and that the majority are struggling financially.

More than 70% of female respondents said they are doing badly financially or feeling unsure about their financial predicament, while 72% of women either don’t have a retirement plan at all or only have a vague understanding of the one they do.

Mica Townsend, Business Development Manager at 10X Investments, said: “RRR19 confirms that women in South Africa are following the global trend of saving less for retirement and investing their savings less aggressively, which can only mean that discrepancies between genders will be magnified in retirement.

“The situation is dire even before you take into account the fact that women have a longer life expectancy than men.”

10X Investments believes that the release of the RRR19 will promote action and awareness in addressing the underlying issues that are poised to financially cripple the South African economy and millions of individual South Africans.

The release of the RRR19 comes amid heated debate on rising poverty levels in South Africa and gender inequality, despite government’s National Development Plan to eliminate poverty by 2030.

10X Investments is a disruptor financial institution that recognises the looming financial crisis South Africa is heading towards and that the majority of South Africans are unlikely to be in a position to support themselves in retirement. 10X also notes that retirement may soon be an impossible scenario for most South Africans to strive for.

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