Key insights from the Sanlam Benchmark Report

1. Eroded confidence: Benchmark found 60% of pensioners do not believe South Africa’s challenges will be resolved within their lifetime, with most respondents citing corruption as the root cause of the country’s issues. This lack of trust cascades down to the country’s financial institutions, with 66% of people saying they felt financially vulnerable or exploited. Financial insecurity emerged as a key theme; 54% of surveyed pensioners felt worried about not having sufficient funds to live comfortably, 52% feared running out of funds during their lifetime, and 35% were worried about their deteriorating health.
2. How South Africans save and invest: Outside of their employer’s retirement arrangements, South Africans are saving for retirement via savings accounts (39%), retirement annuities (26%), fixed deposits (23%), stokvels (21%), and tax-free savings (19%). Interestingly, in terms of investments, when offered the choice, about 87% of employer fund members and 82% of umbrella sub-fund members opt into trustees’ choice/default portfolios. This shows the need for robust default portfolios. People are mostly (72%) relying on online sources for information on financial products; just 27% are making use of an adviser made available via a fund. This suggests financial advisers are an underutilised resource for members.
3. Sources of financial stress: In 2019, Benchmark research revealed respondents found debt to be a key contributor to their financial stress. In 2024, respondents said they were most concerned about their retirement savings and access to healthcare benefits. Close to half of all respondents said they were struggling with debt with little left at month-end to save or take up medical benefits.
   
   This year, 80% of South Africans said they were currently experiencing financial stress which was impacting their mental health. Adding to this, the Benchmark survey found that 39% of Sanlam Umbrella Fund participating employers have experienced an increase in absenteeism because of stress, anxiety, or other mental health issues. In South Africa, the combined total cost of mental-health related absenteeism and presenteeism is equivalent to 4.8% of GDP (Schoeman, 2022), which means the country has one of the highest costs of mental illness in the world.
4. ​​Employers can be – and see – the change: Given South Africa’s quadruple burden of disease, including HIV/AIDS and TB, maternal and child mortality, non-communicable diseases (NCDs), and injuries and trauma – employers can play a pivotal part in making a difference to their employees, and the nation as a whole. According to the Sanlam Benchmark 2024 survey, 53% of respondents believe that a holistic integrated health and financial wellness programme delivers higher productivity and staff happiness. An overwhelming majority of employees (93%) view wellbeing as important as their salary, and 87% would consider leaving a company that does not focus on wellbeing.
   
   Implementing integrated healthcare solutions such as low-cost medical scheme options, primary healthcare insurance, on-site clinics, virtual consultations, and Employee Assistance Programmes (EAP) can significantly alleviate the financial burden on employees. These measures can reduce absenteeism, presenteeism, and turnover while enhancing workplace productivity and staff retention.
5. Alternatives to Two-pot: In 2022, Sanlam Benchmark research found just 31% of respondents said they’d access funds from their Two-pot savings component. In 2024, this jumped to 59%. Accessing savings now could compromise accumulated savings at retirement and mean an individual doesn’t have sufficient funds later to cover additional health costs, for example.
   
   To help employees achieve the optimal combination of cultivating a robust retirement savings culture whilst being able to deal with financial distress – the inability to meet financial obligations – employers should consider empowering their team with alternatives to accessing their Two-pot savings. This could include loyalty programmes, money management tools, debt management assistance, and access to advice.