South Africa faces a retirement crisis as only 10% plan to retire at 60: FNB survey

Only 10% of respondents in the 2025 FNB Retirement Insights Survey are planning to fully retire at 60, according to recently released data.

Now in its third year, the FNB Retirement Insights Survey reveals that although 60% of South Africans under 60 say they have a retirement plan, very few are actually on course to reach their goals. Economic pressures, ranging from debt to rising living costs, are causing many to delay contributions, dip into savings early, or abandon retirement planning entirely.

 According to the data, middle-income earners, who are often seen as the engine of retirement savings, are among the hardest hit. Contributions to retirement annuities in this group have dropped dramatically, from 51% to just 34%, as day-to-day expenses take precedence over long-term planning.

Lytania Johnson, CEO of the FNB personal segment, stresses the urgency of the matter:

“The gap between expectations and outcomes must be urgently addressed. There is growing positive momentum in our industry and a visible shift from a ‘one day’ to a ‘day one’ mindset. We are seeing more South Africans recognising the need to plan and take initial steps – but awareness without action won’t secure the futures that people want. That’s where financial institutions and retirement funding providers, and intermediaries now have a more critical role to play than ever before.”

Rather than apathy, it’s a sense of overwhelm that is paralysing many South Africans.

Sizwe Nxedlana, CEO of FNB Private Segment, says what’s clear is that most people aren’t ignoring retirement, they are just overwhelmed by it.

"The survey found that procrastination often stems from not knowing where to start. We see that people don’t avoid planning because they don’t care; they avoid it because it feels too big, too far away, or too confusing. That’s why we need to meet people where they are, with tools and advice that break things down and build momentum.”

The data shows that even those with retirement plans harbour deep anxieties about inflation, future medical costs, and whether their money will stretch.

Young people remain hopeful, aiming to replace 75% or more of their income in retirement, but the reality among those already retired paints a bleaker picture, it says.

Many older South Africans are working well past their planned retirement age, trimming budgets, or relying on adult children. Some retired respondents spoke of losing their sense of purpose, feeling isolated, or experiencing regret about not planning earlier, it reveals.

The research highlights an alarming blind spot: while 60% of respondents have funeral cover, fewer than 40% have a valid Will. Misconceptions persist, especially among the youth and lower-income groups, that Wills are only for the wealthy. Others avoid drawing up a Will due to time constraints or uncertainty about who should inherit their assets. Yet without a valid Will, families can be left vulnerable at the worst possible time.

“Funeral cover is almost universal in South Africa because people want to ease the immediate burden on family. But a Will does that too, and more. It’s not just for the wealthy. It’s about protecting your family in the long term,” says Nxedlana.

Awareness of the Two-Pot retirement reform is growing; nearly 70% of respondents have heard of the system, and close to half claim to understand it. Encouragingly, fewer than a third have withdrawn from their savings portion, the data reveals.

“The concern is that while the reform offers short-term relief, the savings pot could be seen as a default emergency fund rather than a tool for building future stability. However, there is some cause for cautious optimism, since 43% of those who haven’t withdrawn from their savings pot say they don’t plan to, which points to an understanding of keeping their retirement savings intact over time,” says Nxedlana.

The concept of retirement itself appears to be evolving. Over half of the respondents plan to supplement their future income with part-time work or side hustles. This shift reflects changing expectations and a demand for greater financial flexibility, the survey shows.

“People aren’t just looking for products; they’re looking for options, guidance, and a greater sense of control,” notes Nxedlana.

And where they seek help is also changing, bank platforms have overtaken social media and peers as the go-to source for financial guidance. Lower fees, improved education, and smart incentives are top of mind for consumers, it says.

Nxedlana says the message is clear: having a retirement plan is no longer enough. What matters is turning intent into action.

“There’s no single fix for retirement. But there are bite-sized steps for everyone. At FNB, we’re focused on helping clients move from merely having a plan for retirement to having a good plan – and from feeling stuck and overwhelmed to taking action," says Johnson.

PERSONAL FINANCE