The dismal level of savings in South Africa is a matter of great concern and Old Mutual welcomes any and all measures that will create incentives for South Africans to save.
The increases in the tax-free threshold for interest and dividend income by R1000 to R19 000 for individuals under 65 years and to R27 000 for those over 65 should go some way in encouraging individuals to save for their retirement, says Rod Stevenson, Senior Legal Adviser at Old Mutual.
With the new thresholds, an individual under 65 with approximately R211 111 invested in a money market account earning 9% pa, will not be taxed for any of the interest income (assuming he has no other interest income). Those that are over 65 can have up to R300 000 invested under similar conditions with no tax on interest income.
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