Moneyweb writes that rising food and petrol prices, amid high unemployment and sluggish economic growth – together with increasing interest rates – are putting the squeeze on many people.

In this situation, many see government’s plan to restructure the pension fund industry to allow immediate access to retirement funds as a solution to their immediate cash flow problems. But, while many households are eager to dip into their retirement savings under the proposed ‘two-pot’ pension fund system, they are ignoring that the new dispensation aims to force more people to save for retirement. They are also ignoring that the two-pot system will put the lid securely on the bigger pot until retirement age. Cash-strapped citizens are said to be looking at the proposals only as far as the part that deals with access to their pensions is concerned, and how soon this will be possible. According to Michelle Acton of Old Mutual Corporate, the finance minister is under “extreme pressure” from weary consumers to deliver on the reforms almost immediately. She commented: “It is the most anticipated [topic] of Finance Minister Enoch Godongwana’s budget speech this week. While it is unlikely that a roll-out plan will be detailed in the budget speech, we can expect Godongwana to give the reforms the green light and, subsequently, assurances that government would take into account the time required by industry to comply with the legislation.” Acton noted that, while the industry welcomed the proposed reforms, she hoped the minister would err on the side of caution to maintain tax system stability and avoid creating unrealistic expectations for indebted consumers.

• Read the full original of the report in the above regard by Adriaan Kruger at Moneyweb

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