Retirement savings for domestic workers

Carina Jooste Latest, Retire

Domestic workers and home employees, like nannies and gardeners, play an invaluable role in many South African households. Notwithstanding the value of their work, they are subject to extreme financial pressures that only worsened due to the pandemic. 

In numbers: Domestic workers in South Africa 

808,000: The number of domestic workers in Q1 2022 (Stats SA Quarterly Labour Force Survey)

2002: The year domestic workers got their first minimum wage in South Africa (it was lower than the minimum wage for other professions)

2022: 20 years later, South Africa aligned domestic worker wages with the national minimum wage.

R23.19/hour: The national minimum wage as of 1 March 2022

So what about their retirement?

Considering the quick facts mentioned above, we can assume that domestic workers aren’t sufficiently set up for retirement. Although low-income earning domestic workers of 60+ years are entitled to a monthly old age grant payment from the government (if they meet a basic set of criteria), it’s definitely not nearly enough to ensure a comfortable retirement. Currently, the maximum amount of South Africa’s state pension is R1,980 and R2,000 for individuals older than 75.

Retirement savings products for domestic workers

By law, employers are not required to offer domestic workers a retirement benefit. However, supporting home workers by helping them understand the need to save for retirement, and the options available to them, can really have a big and lasting impact. Employers can also make deductions from their domestic worker’s salaries, by mutual agreement, to go towards their retirement savings. 

So, what products are available to domestic workers to set them up for old age? Unfortunately, not a lot. 

Here’s what we managed to find online:

Old Mutual

Old Mutual launched a retirement savings product specifically for domestic workers called the Domestic Workers Plan in 2007, but that offering is not available anymore. They did however refer us to the Old Mutual Retirement Plan that starts from R400 per month. 

Despite several pieces confirming their support for fee transparency in retirement fund products (see ASISA Retirement Savings Cost (RSC) Disclosure), we couldn’t find clear information on the fees. 


Sanlam has a Small Business Provident Fund* aimed at small businesses and home employees. Important to note is that employers of domestic workers don’t have to be a small business to consider this option for their home employees. 

As a provident fund, it pays out the lump sum invested plus returns earned on retirement (retirement age being 55 years) or when your employee stops working for you.

The fund features several savings options, starting at a very basic savings plan at R270 per month, with subsequent options offering a more comprehensive package, including death, capital disability, and funeral benefits.

As always, it’s important to pay heed to the fees, as the following costs are deducted from the monthly contribution before it is invested:

  • Risk costs: 

This is labeled as the cost of providing death, capital disability, and funeral benefits.

  • Administration costs: 

A portion of the cost of administration, including consulting and advisory services.

Are these the only options?

Definitely not. Terence Tobin, financial planner and founder of the Rich Ideas group, recommends a regular investment account at Easy Equities. “They are low cost, easy to set up and with no restrictions. Should the employee leave, the funds can be given to them or access given to them.  So it’s not in the traditional sense a retirement fund, but can be used like one.”

Other ways to support the financial wellbeing of home employees

UIF: If your home employee works more than 24 hours at your residence, you need to register them for UIF. 

Financial education: Times are tough. So it’s important to talk about money with your home employees. 

Did we miss something?

Please share any ideas or insights into products you’re leveraging for this purpose. We would love to hear from you!

*Sanlam Corporate, the division responsible for the offering, is in the process of revamping the offering to a fully digital offering. 

Retire blog

Saving for retirement is the biggest investment most of us will ever make. Sadly, it can also be very complicated. In this monthly blog, Carina Jooste responds to common retirement questions, ranging from which products are best suited to different circumstances to efficient tax treatments.