Finance Minister Enoch Godongwana Warns Against Premature 2-Pot Savings Withdrawals

• Finance Minister Enoch Godongwana gave citizens advice about how to use their money wisely ahead of the new retirement system
• The two-pot retirement system comes into effect on 1 September 2024 and affects when residents can access their retirement savings
• South Africans aren't pleased with Gondongwana's warning and have vowed to spend their money as they wish to do so

Briefly News journalist Byron Pillay has spent a decade reporting on the South African political landscape, crime and social issues.

Finance Minister Enoch Godongwana has warned citizens about adequately managing their pensions when the two-pot system takes effect, but not everyone is taking his advice seriously.

Speaking ahead of the ninth annual meeting of the New Development Bank, Godongwana urged South Africans not to withdraw from their pension, but to think about it carefully.

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“If you ask me, I will not encourage anybody to jump for it with ease. People must think carefully because this is their future savings. It’s not an emergency,” he said.

Gondongwana has been the Minister of Finance since 2021, but his appointment to the post was initially criticised by the EFF.

What is the 2-pot retirement system?

The system, which takes effect on 1 September, will mean that South Africans can no longer access the entire portion of their retirement savings as they wish.

One-third of the money will be moved into a savings component, which can be accessed anytime, while the remaining funds will be reserved for retirement. This can only be accessed once the individual turns 55.

South Africans make light of minister’s advice

Despite Godongwana’s warning, social media users aren’t too fazed and have instead made light of the situation.

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Many questioned why their savings would be taxed when they already have to pay taxes while working, while others were defiant in saying that they would withdraw their money when they wanted to.

It's not the first time Gondongwana's words have worried South Africans; last year, he delivered a bleak mid-term budget.

Siphephelo Khwenyana Mkhwanazi said that he already knew what he was going to do:

“We are withdrawing, our minds are made up. People must stop telling us what to do with our money.”

While Pretty Baloyi added:

“He is too late. Now I am ready to withdraw. I don't need any further advice. Nobody can stop me, I'm going there 😂😂😂"

Wilson Mohale expressed his concern about how people would be taxed when he said:

“They failed to ease tax on this two-pot system. The tax man is going to take lot of our hard-earned money."

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MosDee Shabba instead focused on how much people were already taxed:

“It is easy to say that when you have money. Let us withdraw our money in peace and pay our bills and debts, and don't tell us about tax because we've been taxed since birth and we are still taxed even for breathing."

Welly Bongz didn't mince his words, saying:

"My money, my decisions Mr Minister."

More tax possible warns Godongwana

The Finance Minister has previously caused panic in the country with some of his comments.

Briefly News reported how citizens would have to pay more tax if there were a Basic Income Grant.

Gondongwana made the comments before tabling the budget, but it left a bitter taste in the mouths of many.

Source: Briefly News