Illustration: Colin Daniel

A large portion of South Africans have retirement savings, but discretionary savings such as unit trust funds are relatively under-utilised. This is according to the results of a poll that digital marketing association IAB South Africa conducted in the second half of last year on people’s investment habits. 

The poll was in the form of a questionnaire distributed across the entire IAB publisher network, and not to visitors of financial or business webpages specifically. There were 5 246 respondents.

Over a third of respondents (35%) indicated they did not have any investments, while, of those who did, most had retirement savings in pension funds and retirement annuities (26% and 27% respectively).

Discretionary investments featured less prominently: 16% of respondents were invested in bank fixed or notice deposits, 12% in shares, 11% in money market investments, 8% in unit trusts and 8% in stokvels. Only 5% had savings in tax-free accounts.

A relatively high 11% were invested in physical property, from which they received rental income.

Of the third who did not have investments, half (or 17% of the sample) said they did not intend to invest in the next six months. Of these, just over half said they had no spare money to invest. But a fair proportion indicated they needed guidance: 14% of respondents under the age of 34 agreed with the statement “Investing is intimidating – I don’t know where to start”, while 34% said they wished someone could explain their investment options in a simple way.

Just over a quarter of respondents (28%) held the view that financial services companies were acting in their own interests instead of offering what was best for the consumer. Regarding the fees these institutions charge, 30% said the fees were very high, while 11% said they didn’t care how high the fees were, as long as the investments performed well. Only 15% of respondents said the fee structure of their investment was clear and transparent.

When it comes to retirement savings, just 6% of respondents said they had saved enough money to retire at their current standard of living; 26% said they were concerned about not having enough to retire comfortably; and 16% said they had started saving for retirement too late.

The banks rated highest among the most trusted companies: Capitec (19%), First National Bank (14%) and Standard Bank (11%).