South Africans know they must save, but debt and gambling keep raiding tomorrow’s money

The 45th Sanlam Benchmark Survey, released this week, found that South Africans believe retirement planning should start at around age 35. In practice, however, retirement fund members only start engaging with their retirement fund 3.4 years before they stop working. They seek financial advice, on average, just 20 months before retirement.

By then, many of the decisions that shape their retirement have already been made.

The 2026 Sanlam Benchmark surveyed 76 stand-alone funds, 130 umbrella fund employers, 30 pensioners who retired four to five years ago, and 600 consumers who are nearing or in retirement.

The findings do not suggest that South Africans are indifferent to retirement. If anything, they show a population that understands the need to save, but is being forced to make short-term decisions under pressure.

Kanyisa Mkhize, chief executive officer of Sanlam Corporate, says retirement confidence is not built in the final years before leaving work. It is built over decades through the decisions people make along the way, including preserving savings when they change jobs, increasing contributions where possible and managing debt.

“Retirement planning also does not stop when someone leaves work. The first few years after retirement are critical, because that is when a lifetime of savings is tested against the reality of living costs, healthcare needs and longevity,” says Mkhize. That test is becoming harder.

Pressure points

Pensioners who take a cash lump sum at retirement now deplete it within an average of 14.6 months. This is down from 30 months reported between 2011 and 2016. Within four to five years of retiring, half can no longer maintain their pre-retirement standard of living, one in three experience financial strain, and 47% carry debt into retirement.

Healthcare is another pressure point. While 33% of retirees remain on the same level of private medical cover, 44% have either downgraded their cover or abandoned private cover entirely and now rely on the state.

The survey also challenges many of the assumptions about age and financial behaviour.

Younger South Africans are often described as short-term thinkers who prioritise experiences over long-term security. The Benchmark data suggests otherwise. Nearly nine in 10 younger respondents say they would rather have guaranteed retirement income than potentially higher investment returns.

Odds on gambling

The pressure is also showing up in gambling behaviour.

The Benchmark found that 50% of respondents in the online consumer portion of the study had spent money on gambling, betting or lottery activities in the previous three months. Of those, 66% used salary or wages as the source of funds.

Nzwa Shoniwa, managing executive at Sanlam Umbrella Solutions, says this suggests that gambling is no longer simply about entertainment for many people.

“It is increasingly bound up with financial pressure, short-term coping and the trade-off between immediate relief and long-term security,” says Shoniwa.

The survey found that 58% of respondents still describe gambling as entertainment. However, 38% say they gamble to generate additional income, while others cite stress relief or trying to recover losses.

Lotto and scratch cards still dominate, with roughly 72% of those who gamble spending money there. But online sports betting and casino gambling now account for more than a third of activity each.

This changes the nature of the risk. Lotto tickets and occasional bets may be seen as harmless, but online gambling can make repeated spending easier, quicker and less visible.

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The Benchmark report notes that the real financial risk lies in “small regular leaks”, the modest but consistent spending that gradually crowds out saving over time.

The issue is not only gambling. It is what gambling now appears to represent for many households: an attempt to stretch income, relieve stress or recover losses in an economy where salaries are already under strain.

The ghost in the machine

Farzana Botha, senior communications manager at Sanlam Risk and Savings, says the financial services industry has often built advice models around age-based assumptions that no longer reflect how people live.

“If product designers and institutions and financial services build solutions based on age brackets, we are not meeting the needs of real people, we are building for an institutional ghost,” she says.

Botha says many of the stereotypes about Gen Z and millennials do not hold up against the data. Younger consumers are not simply chasing lifestyle spending. Many are looking for certainty because they have lived through repeated economic shocks, fractured career paths and rising financial pressure.

“One of the stark statistics that came out of the research is that 88% of the respondents in this group would prefer guaranteed income and security. Now that is hugely controversial, considering what we’ve always considered about them before,” says Botha.

The financial pressure is visible in the two-pot retirement system as well.

According to Botha, 44% of younger respondents had accessed their two-pot savings, with many taking the maximum amount available.

“Most of us would assume that they use that for experiences and for luxury goods, but in actuality, what they use that for was to settle debt,” she says.

Brian Karidza, client relationship manager at Simeka Consultants and Actuaries, says the industry often reduces the retirement problem to simple instructions: save more, contribute more and do not withdraw. But the average member is not making decisions based on a spreadsheet.

Karidza recalled an instance where a client said to him, “Brian, I’m not going to make a retirement decision on a spreadsheet. I’m making a retirement decision in a household where I’m facing financial pressures, even though you told me all these things, that’s what comes first, not your spreadsheet.”

For many South Africans, this is the real retirement crisis. It is not caused by a lack of knowledge alone. It is caused by the daily fight between what people know they should do and what they can afford to do.

“The reality is that the average member is faced with a decision of prioritising immediate needs or saving for retirement, and it might seem obvious to us that you should save for retirement, but if you’re stuck with having to save for medical expenses, black tax, and taking care of extended families, it is not so obvious that you need to save for retirement,” said Karidza.

The old retirement story was neat: start working, join a fund, save consistently, preserve your money and retire comfortably.

The new story is messier. People change jobs, cash out under pressure, carry debt, support family, downgrade medical cover, gamble to stretch income and often seek advice only when there is little room left to change the outcome.

The 2026 Sanlam Benchmark does not show that South Africans have stopped caring about retirement. It shows that tomorrow’s money is being raided by today’s financial pressures. DM