As 2025 begins, many South African workers are confused about whether the official retirement age has changed. Rumours, online claims and misleading headlines have suggested that the retirement age is now fixed at 65 for everyone.
However, the truth is different. South Africa does not have a single national retirement age that applies to all workers. Instead, retirement age is determined by employment contracts, pension fund rules and whether a person works in the public or private sector.
What Is the Real Retirement Age in South Africa in 2025?
There is no universal retirement age set by the government. Most private-sector employees retire according to the policy of their company or the rules of their retirement fund. Many funds use ages between 60 and 65 as the “normal retirement age,” but this can differ from company to company.
In the public sector, some job categories may have their own fixed retirement ages, but there has been no nationwide change forcing all workers to retire at 65. Any claims that the government officially increased the retirement age for everyone are inaccurate.
The Two-Pot Retirement System: The Biggest Change for 2025
While the retirement age remains unchanged, South Africa has introduced one of its most important pension reforms: the Two-Pot Retirement System. This new system changes how retirement savings are structured and when funds can be accessed.
Under the Two-Pot model, retirement contributions are divided into separate components. One part allows limited withdrawals during working years, while the other portion must remain preserved until retirement. Funds saved before the new system started remain in a separate pot with older rules.
This reform aims to protect long-term retirement savings while still giving workers controlled access to money during financial emergencies.
How the Two-Pot System Works for Workers
In the new system, a worker’s retirement contributions get divided into two main categories. One section acts as a flexible savings portion from which workers can withdraw once a year, although tax will apply on these withdrawals. The other section is fully preserved and can only be accessed when the person retires.
Older savings, accumulated before the change, stay in a different pot and follow the old withdrawal rules. This ensures that workers don’t lose access to previous benefits.
The purpose of this structure is to prevent people from cashing out their entire retirement fund when changing jobs a common issue in the past that left many workers without enough money for retirement.
What South African Workers Should Expect in 2025
Workers should expect more transparency and more control over their retirement savings. The system gives people access to a portion of their money in emergencies, but also ensures that the majority of their retirement funds stay locked in until retirement age. This helps build long-term financial security.
However, workers need to be careful. Every withdrawal from the flexible pot is taxed, and taking out money too often can reduce total retirement savings at the end of their career.
Does the New System Change When You Can Retire?
No. The Two-Pot System affects how money is saved and accessed, not the age of retirement. You will retire at the age stated in your employment contract or pension fund rules unless your sector has a different requirement. There is no new rule forcing everyone to retire at 65.
The Bottom Line
South Africa’s retirement age has not changed, but the way retirement savings work has changed significantly. The Two-Pot System is the biggest update workers need to understand in 2025. It offers more flexibility, but also requires careful planning to ensure long-term security.