On 1 September 2024, South Africa implemented the Two-Pot retirement system, following its approval by President Cyril Ramaphosa in June 2024. This reform has reshaped the retirement landscape, especially for South Africans living abroad.
Lock-In Rule Background
Before March 2021, individuals who formally ceased tax residency could access their full retirement savings immediately upon ceasing their tax residency. As of 1 March 2021, the new three–year lock–in rule was introduced which meant that retirement savings could only become accessible after three years post–emigration, however, still subject to lump sum tax on withdrawal.
Important: Waiting three years before formalising non-residency is not advised. It can pose compliance and financial risks.
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