Sean van Zyl | Certified Financial Planner ® | Registered Tax Practitioner | Old Mutual Personal Finance | mail me |
With the end of the 2025/2026 tax year fast approaching, South Africans have a narrowing window to make financial decisions that can meaningfully improve their savings outcomes. Acting before the tax year closes can deliver immediate tax benefits and lasting financial advantages.
February ranks among the most important months on the financial calendar. This is particularly true for investors considering tax-efficient options such as Retirement Annuities (RAs) and Tax-Free Investments. In this context, higher earners face a closing window to optimise their tax and savings strategies.
The opportunity offered by a Retirement Annuity lies in the tax deductibility of contributions of up to 27.5% of taxable income, capped at R350,000 per year. A person earning between R30,875 and R42,733 falls within the 31% marginal tax bracket. As an illustration, this means the person could reduce their tax or receive a refund of R0.31 per R1 contributed.
Tax-efficient investment vehicles
Similarly, Tax-Free Investments offer another powerful incentive. These products apply no income tax, dividends tax, or capital gains tax to investment growth. Investors may contribute up to R36,000 per tax year, with a lifetime limit of R500,000. These vehicles are incredibly effective when used consistently, as every rand invested compounds without the drag of tax.
For many investors, higher earners face a closing window to maximise these limits before the tax year ends. To make the most of these opportunities, access to sound financial advice remains one of the strongest drivers of good savings behaviour. However, many households only seek guidance once their financial decisions become increasingly complex.
Our latest Savings & Investment Monitor (2025) shows that South Africans who work with financial advisers display significantly higher confidence in their savings and investment decision-making.
The role of financial advice
Across the national sample, 45% of respondents reported using a financial adviser. This figure rises to around 60% among earners in the R30, 000 – R59,999 income band. It increases further to approximately 65% in the R60,000 – R119,999 group. This trend highlights the growing role of advice as financial decisions become more discretionary and as higher earners face a closing window for strategic financial planning.
While national savings trends often dominate public discussion, the conversation needs to be far more personal. Saving is not just an economic concept; it is a personal safety net and a future enabler. For each investor, saving is ultimately about creating choices, protecting your lifestyle and building long-term financial security.
As incomes rise, financial decisions tend to become more complex. This complexity requires structured planning, disciplined habits and a clear understanding of long-term trade-offs.
Research shows that households without professional guidance frequently fall into behavioural traps. These include lifestyle inflation, overreliance on credit, insufficient insurance protection and inconsistent saving patterns, all of which can undermine long-term financial progress.
Behavioural risks and long-term goals
Insights from the Savings & Investment Monitor also highlight behavioural patterns that can derail long-term goals. Many lower-income households rely on informal savings mechanisms such as stokvels. In contrast, higher-income earners tend to focus on longer-term objectives but remain vulnerable to behavioural risks.
Gambling, excessive credit use, and day-to-day spending pressures continue to erode financial progress across income groups.
Advisers play a critical role in helping customers address these risks by reviewing household budgets, strengthening liquidity planning, and sequencing financial goals appropriately. This structured approach helps customers balance short-term pressures with long-term priorities.
In conclusion
Despite ongoing financial pressure, many South African households are actively trying to move forward. They are cutting back on non-essential spending and supplementing income to support their savings goals. This momentum presents an important opportunity for further advice, as aspirational spending can quickly compete with long-term financial objectives.
Personalised financial advice helps customers avoid costly mistakes, structure their savings effectively and ensure their money consistently works toward the future they want.
