Consumers dip more into retirement savings, says Alexander Forbes

Diversified financial services group Alexander Forbes Holdings said on Monday SA’s sluggish economy continues to impede its revenue growth, with it clients dipping more into their retirement savings during its six months to end-September.

Savings and retirement markets remain under pressure, the group said on Monday, demonstrated by the preservation rate for retirement savings declining from 55% to 53% during the period.

This refers to the percentage value of retirement funds that are transferred to preservation or retirement solutions after an employee resigns or retires from a company.

The company is exiting its noncore operations, having agreed to sell its short-term insurance business to Momentum Metropolitan Holdings for about R1.9bn, though it is still subject to approval.

Headline earnings per share rose 42% to 24.5c in its six months to end-September, with profit for the period surging to R250m, from R53m previously.

In its retirement business, members under administration declined 17,000 to 927,000.

“We continue to work with determination to implement our strategy of simplifying our business, improving our product offering to our clients and ensuring that we deliver best advice and measurable benefits to them,” said CEO Dawie de Villiers.

“We are pleased with the progress made to date and we are confident that through our new integrated value proposition, our clients will benefit positively from our best advice,” he said.