Personality, Money Attitudes, and the Two-Pot System Explained
What does new research reveal about Two-Pot retirement fund withdrawals in South Africa?
A recent South African study published in the Journal of Consumer Behaviour (Nixon, 2026) explored why some retirement fund members choose to make early withdrawals under the Two-Pot system while others don’t. The findings challenge a common assumption in financial planning: that behaviour is driven mainly by information, incentives, or willpower.
What the research actually shows is a more nuanced picture, one shaped by the interaction between personality, money attitudes, and context. For financial coaches and planners, this distinction is significant. Behaviour is not simply a product of discipline or knowledge. It is shaped by meaning, identity, and how people experience money under pressure.
What is the Big Five personality model, and why is it relevant to financial behaviour?
The study is grounded in the Big Five Personality Model, one of the most extensively validated frameworks in psychology. Rather than labelling people, the model describes relatively stable orientations toward the world across five dimensions:
- Conscientiousness — the tendency to plan, organise, and delay gratification
- Neuroticism — sensitivity to stress, uncertainty, and emotional volatility
- Extraversion — orientation toward action, engagement, and responsiveness
- Agreeableness — concern for harmony, relationships, and the needs of others
- Openness to Experience — curiosity, imagination, and comfort with ambiguity
Crucially, the research does not assume that personality directly causes financial behaviour. Instead, personality shapes how people experience money, which then influences what they do. This distinction matters enormously in coaching.
How does conscientiousness affect retirement withdrawal decisions?
Conscientious individuals tend to plan, budget, and delay gratification. The study confirms that higher conscientiousness is associated with fewer early withdrawals.
But here is the nuance: once money prudence is already established, additional conscientiousness adds little extra protective effect.
This raises a quiet but important coaching question: when planning becomes a way to manage anxiety, what happens when certainty disappears? Planning supports behaviour. Purpose sustains it.
Does financial anxiety always lead to poor decisions?
Not on its own. The research shows that neuroticism, sensitivity to stress and emotional volatility do not act alone. Its impact on withdrawal behaviour is amplified or softened by money attitudes, particularly a person’s level of money anxiety.
This reframes the coaching conversation: anxiety does not cause poor decisions. Unexamined anxiety does. Creating space to name fear without letting it drive the plan is one of the more valuable things a financial coach can do for a client navigating the Two-Pot decision.
What role does the desire to “do something” play in early withdrawals?
Extraversion is associated with action, responsiveness, and engagement. In financial contexts, this can show up as a preference for switching, moving money, or acting during periods of market volatility or personal pressure.
While extraversion was not the strongest predictor in this study, it interacts meaningfully with system design, particularly when access and action are frictionless, as the Two-Pot savings component is intended to be.
A useful coaching reflection: What emotional need does action meet for you right now?
Why do some people access retirement savings to help family or avoid conflict?
Agreeableness, concern for harmony, and a tendency to prioritise others help explain many real-world withdrawal decisions, particularly those driven by family dynamics or crisis contexts.
While agreeableness was not central to the withdrawal patterns identified in this study, it surfaces frequently in practice. Financially agreeable clients often need support in distinguishing between what they are responsible for and what they feel responsible for.
Can being calm and confident actually increase the likelihood of a withdrawal?
Yes, and this is one of the most counterintuitive findings in the research. Emotionally stable individuals were sometimes more likely to make early withdrawals, particularly when they were also financially prudent.
The likely explanation: confidence, calmness, and fluency with the financial system may reduce emotional barriers to accessing money. A client who is comfortable and capable is also a client who can act decisively, in either direction.
This is a useful reminder: calm does not always equal caution.
What is “money prudence,” and why does it matter more than personality traits?
Money prudence refers to learned habits, beliefs, and behaviours around careful money management. It includes the tendency to plan ahead, save consistently, and think carefully before financial decisions.
The research identifies money prudence as the single strongest protective factor against early withdrawal, stronger than any individual personality trait. This has significant implications for financial coaching: because prudence is a learned orientation rather than a fixed trait, it is workable. It can be cultivated, reinforced, and made more robust through reflective practice and intentional conversation.
What does this research mean for financial coaches and planners?
The study validates something many practitioners already sense: behaviour does not change through information alone. It changes through meaning, identity, and self-trust.
For purpose-driven financial coaching, the practical implications include:
- Working with money attitudes — how clients feel and the language they use — not just their personality profile
- Strengthening prudence without increasing rigidity or anxiety
- Creating reflective space before irreversible decisions
- Helping clients connect present choices to the person they are becoming
Rather than asking “Is this a good or bad decision?”, the more generative question is often: “What other choice do you have?” or “Who are you becoming through this choice?”
What is the core takeaway from this research for South African financial professionals?
The Two-Pot system did not create new behaviour. It revealed existing relationships with money.
Financial behaviour is contextual, emotional, and identity-shaping. The invitation for coaches and planners is clear: move beyond personality labels and product rules. Work with attitudes, stories, and purpose. That is where sustainable behaviour change lives.
Research and References
- Nixon, P. (2026). The moderating role of money attitudes in the relationship between personality and financial behaviour. Journal of Consumer Behaviour.
- McCrae, R. R., & Costa, P. T. (1999). A five-factor theory of personality. In Pervin & John (Eds.), Handbook of Personality.
- John, O. P., Naumann, L. P., & Soto, C. J. (2008). Paradigm shift to the integrative Big Five trait taxonomy. In John, Robins & Pervin (Eds.), Handbook of Personality.
- Momentum Investments. (2023). Sci-Fi Report: The Behavioural Science of South African Financial Decisions. Johannesburg: Momentum Investments.
