The August ASISA Dispatches provided the following information on Living Annuities.
The 2016 Living Annuities Survey statistics were finalised in August.
The survey showed that living annuity policyholders withdrew on average 6.62% of their capital as income in 2016, which represents a marginal increase on the 6.44% living annuity drawdown rate recorded for 2015.
In 2016, South Africans had R333.2 billion of their retirement savings invested in 380 186 living annuities. In 2015, there were 410 898 living annuities with assets of R331.6 billion.
Commenting on the 2016 Living Annuities Survey, Taryn Hirsch, senior policy advisor at ASISA, says the small increase in the drawdown rate came as a pleasant surprise given the steep rise in the cost of living in South Africa in recent years.
“While we would have preferred to see the drawdown rate continue the small yet steady downward trend of the past five years, we have to accept that many pensioners are finding it increasingly difficult to maintain their standard of living without adjusting their drawdown rates upward.
“We need to take into consideration that inflation came in at 6.6% for 2016 and the JSE All Share Index returned only 2.6%. Under those circumstances the small increase is understandable and pensioners and their advisers need to be commended for tightening the proverbial belt rather than increasing their drawdown rates substantially.”
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