Don't drain your Two-Pot withdrawal on prepaid: a household budget walkthrough
The Two-Pot retirement system has put cash in many households' pockets in 2024–25. We've seen too many people burn the lump sum on bulk prepaid and then face the same problem next month. Here's a smarter sequence.
Don't drain your Two-Pot withdrawal on prepaid
Since September 2024, the Two-Pot Retirement System has let working South Africans access a portion of their retirement savings once a year. We've spoken to enough Yebogezi readers to see a pattern: when the lump sum lands, prepaid is one of the first things people "stock up" on, on the hope that it will smooth out next month.
It usually doesn't. Here's why, and what to do instead.
Why bulk prepaid doesn't work the way people think
Prepaid units do not roll over a tariff increase. If you buy a year's worth of units in February at the old rate, your meter will still credit them at today's rate when you load them. The token is a value token, not a kWh token, and it expires after about 90 days unloaded anyway. (Source: STS-203 specification, the international prepaid token standard.)
Worse, the [Inclining Block Tariff](/tariffs) is calculated per calendar month — so even if you load a single huge token on the 1st, you pay the higher block rate on every unit you actually consume after the threshold that same month.
A smarter sequence (R5,000 example)
1. Pay the highest-interest debt first — usually short-term retail accounts and clothing accounts at 26–28%. Knocking R1,000 off here saves R260 a year, guaranteed. 2. Settle any arrears on your municipal account in writing. This stops the arrears recovery on every prepaid token going forward — see our explainer on [why R200 buys fewer units some months](/blog/why-r200-buys-fewer-units-this-month). 3. Top up prepaid with one normal month's spend, no more. Don't bulk-buy. 4. Ring-fence R1,000 for an emergency fund. A blown geyser element is R600–R900 in 2025. The rest of your withdrawal is gone if you don't. 5. Apply for [Free Basic Electricity](/fbe) if you qualify. Don't leave 50 kWh/month on the table.
Where Yebogezi fits
We're independent of every supplier and we don't sell financial products. We offer a paid R249 [Bill Review](/services) if you want a person to walk through your specific municipality and household consumption with you. Or use the free [calculator](/calculator) and [energy planner](/energy-planner) — they're built for South African block tariffs, not American flat-rate utilities.