In a significant reform to South Africa’s retirement savings landscape, the Two-Pot retirement system was signed into law by President Ramaphosa on 1 June 2024, which took effect on 1 September 2024.

Prior to March 2021, individuals who ceased their tax residency and confirmed their emigration status with the South African Reserve Bank could withdraw their retirement interest in South Africa immediately. With effect from 1 March 2021, these retirement benefits are locked in for a minimum period of three years (lock-in rule), after which they could be fully withdrawn (subject to lump sum tax implications).  

The three-year lock-in–rule does not imply that an individual who wishes to withdraw their retirement interest should postpone their formalisation of non-residency until the three-year period has lapsed. This is a risky approach that should be avoided. 

Now, following the changes that have come into effect after the implementation of the new Two-Pot retirement system, South Africans living abroad have been presented with an alternative option.  
 
Those who have formally ceased their tax residency status by using financial emigration or have been noted as non-residents for tax purposes in South Africa have the rare opportunity to withdraw their total retirement savings from South Africa without having to wait until the maturity date of the three-year lock-in rule. 
 
Contact one of our expatriate tax experts today to assist you with your early withdrawals.