Financial advice remains critical as the tax year-end approaches

With the end of the 2025/2026 tax year fast approaching, South Africans have a narrowing window to make financial decisions that can meaningfully improve their savings outcomes.

Acting before the tax year closes can deliver both immediate tax benefits and lasting financial advantages.

According to Sean van Zyl, Certified Financial Planner? at Old Mutual Personal Finance, February is one of the most important months on the financial calendar, particularly for investors considering tax-efficient options such as Retirement Annuities (RAs) and Tax-Free Investments.

The opportunity offered by a Retirement Annuity lies in the tax-deductibility of contributions of up to 27.5% of taxable income, capped at R350 000 per year. A person earning between R 30 875 and R 42 733, would be in the 31% marginal tax bracket. As an illustration, this means the person could reduce their tax or get a refund of R0.31 per R 1 contributed.

Similarly, Tax-Free Investments offer another powerful incentive, with no income tax, dividends tax, or capital gains tax applied to investment growth. Investors may contribute up to R36 000 per tax year, with a lifetime limit of R500 000. “These vehicles are incredibly effective when used consistently, as every rand invested compounds without the drag of tax,” van Zyl explains.

To make the most of these opportunities, van Zyl says access to sound financial advice remains one of the strongest drivers of good savings behaviour, yet many households only seek guidance once their financial decisions become increasingly complex.

The latest Old Mutual Savings & Investment Monitor (2025) shows that South Africans who work with financial advisers display significantly higher confidence in their savings and investment decision-making.

Across the national sample, 45% of respondents reported using a financial adviser. This figure rises to around 60% among earners in the R30 000–R59 999 income band and approximately 65% in the R60 000–R119 999 group, highlighting the growing role of advice as financial decisions become more discretionary.

Van Zyl notes that while national savings trends often dominate public discussion, the conversation needs to be far more personal. “Saving is not just an economic concept; it is a personal safety net and a future enabler. For each individual investor, saving is ultimately about creating choices, protecting your lifestyle and building long-term financial security,” he says.

As incomes rise, financial decisions tend to become more complex, requiring structured planning, disciplined habits, and a clear understanding of long-term trade-offs. Research shows that households without professional guidance frequently fall into behavioural traps such as lifestyle inflation, overreliance on credit, insufficient insurance protection, or inconsistent saving patterns, all of which can undermine long-term financial progress.

Insights from the Savings & Investment Monitor also highlight behavioural patterns that can derail long-term goals. While many lower-income households rely on informal savings mechanisms such as stokvels, higher-income earners tend to focus on longer-term objectives but remain vulnerable to behavioural risks. Gambling, excessive credit use, and day-to-day spending pressures continue to erode financial progress across income groups.

“Advisers play a critical role in helping customers address these risks by reviewing household budgets, strengthening liquidity planning, and sequencing financial goals appropriately. This structured approach helps customers balance short-term pressures with long-term priorities,” says van Zyl.

Despite ongoing financial pressure, van Zyl notes that many South African households are actively trying to move forward by cutting back on non-essential spending and supplementing income to support their savings goals. This momentum presents an important opportunity for further advice, as aspirational spending can quickly compete with long-term financial objectives.

“Personalised financial advice helps customers avoid costly mistakes, structure their savings effectively and ensure their money consistently works toward the future they want,” van Zyl concludes.