The Public Servants Association has urged state employees to exercise caution before tapping into their retirement savings through the Two-Pot Retirement System, warning that recurring withdrawals severely diminish future financial security.

The advisory addresses intensifying cost-of-living pressures, as households grapple with surging expenses spanning housing, food, transport, healthcare, and education against lagging salary adjustments.

National Treasury and revenue data reveal widespread utilisation since the legislative rollout in September 2024, with cumulative disbursements surpassing R57-billion across nearly four million transactions by mid-2025.

Prior to leaving the South African Revenue Service (SARS), former commissioner, Edward Kieswetter, had confirmed that taxation on these disbursements yielded approximately  R15-billion, with nearly four hundred and seventy-eight thousand transactions representing repeat withdrawals.

Recent analysis from Momentum Corporate underscores that 44% of claimants utilise funds for debt liquidation, while 23% cover living expenses and twenty percent fund educational costs.

Furthermore, Momentum indicated that claims following subsequent withdrawal windows predominantly reflect repeat applicants rather than first-time users.

While acknowledging that genuine financial distress may leave workers with few alternatives, the PSA cautioned against treating long-term investment funds as short-term bank accounts.

“This creates a damaging cycle that progressively erodes an employee’s retirement security,” the association stated.

PSA advised members to exhaust alternative debt-management interventions, negotiate creditor arrangements, and consult professional financial advisors prior to application.

Additionally, the association called upon the government and employers to tackle systemic economic drivers to ensure workers can eventually retire with dignity.