Old Mutual Retirement Annuity Review 2026: Fees, Returns & How It Compares

The Old Mutual Retirement Annuity is a long-term, tax-advantaged savings product built to help South Africans build retirement capital outside of an employer pension or provident fund. If you’re researching whether it’s the right choice for you, here’s what you need to know upfront: it’s one of the most widely used RAs in the country, with broad fund choice, a stable platform, and access to smoothed-bonus funds that appeal to more cautious savers. The fees are competitive for most investors, but they can be higher than low-cost alternatives like 10X Investments, depending on the funds you choose and whether you use a financial adviser.

I’ve worked with dozens of clients who hold Old Mutual RAs, and the same patterns emerge each time. Some are getting genuine value from the breadth of options and adviser support. Others are paying more than they need to because they haven’t looked closely at their total fees, or because they landed with Old Mutual by default rather than by design. This review covers what you’re actually paying, what investment options are available, how the tax benefits work in real rand terms, and how Old Mutual stacks up against its main competitors.

If you’re still unclear on what a retirement annuity actually is, that article explains the basics. You can also use the retirement planning tool to model whether an RA makes sense for your specific situation.

What Exactly Is the Old Mutual Retirement Annuity?

The Old Mutual Retirement Annuity is issued under Old Mutual’s life licence and governed by both the Pension Funds Act and the Long-term Insurance Act. It’s also subject to Regulation 28 of the Pension Funds Act, which is the rule that limits how much of a retirement fund can sit in any single asset class. The idea behind Regulation 28 is simple: keep your retirement savings diversified rather than concentrated in one bet. The most discussed limit is the offshore cap, which currently sits at 45% of the portfolio. Because these limits are reviewed periodically, verify the current position on the FSCA website before you lock in a fund allocation.

As a Pension Funds Act vehicle, your money inside an Old Mutual RA is protected from creditors. You cannot access the capital before age 55 except in very limited circumstances, which I’ll cover below. At retirement, you follow the standard RA rules: up to one-third of the balance can come out as a cash lump sum, and the remainder must be used to purchase an annuity.

The platform runs on Old Mutual’s Max investments administration system, which gives you online access to switch funds, view statements, and update contributions. Old Mutual is one of South Africa’s largest financial services groups. That scale brings stability, but it also brings product complexity. Not all Old Mutual RA products are the same. The older Greenlight-era policies behave very differently from the current Max platform contracts, a point I’ll come back to when we discuss fees.

At retirement, you’ll need to decide between a living annuity, a life annuity, or a combination of both. Understanding how a life annuity works before you reach that point is worth your time.

The Tax Benefits of a Retirement Annuity in South Africa

The tax case for using an RA is strong, and I want to show you this in actual rand terms because the benefit is often larger than people expect.

SARS allows you to deduct up to 27.5% of the greater of your taxable income or remuneration, capped at R350,000 per year, as a contribution to approved retirement funds. These figures are set by the annual budget and can change, so verify them on the SARS website each year.

For most salaried professionals, this means a contribution that would otherwise come from your after-tax pay instead reduces your taxable income directly. Let me make this concrete with a real example.

Suppose your taxable income is R600,000 and your marginal tax rate is 41%, which is where many mid-to-senior professionals sit. You contribute R120,000 to your RA. SARS allows that deduction, so your taxable income drops to R480,000. The tax saving in this year is roughly R49,200. That’s effectively free investment capital added to your RA before your investment even begins growing. Over 20 years, the compounding effect of this single decision is substantial.

Inside the RA wrapper, growth is also tax-free. You pay no tax on interest, dividends, or capital gains while your money is invested. Outside an RA, each of these would be a taxable event. Over a saving period of 20 or 30 years, the tax-free compounding makes a material difference to your ending balance, all else being equal.

At retirement, you can take up to one-third of your RA balance as a lump sum. The first portion of that lump sum is tax-free. As of the 2024/25 tax year, this threshold is R550,000 across all retirement fund lump sums you have ever received, but this amount is adjusted from time to time, so verify the current figure on the SARS website.

Use the retirement planning tool to model your own numbers and see what a contribution deduction means for your specific income and tax bracket.

Old Mutual Retirement Annuity Fees: What You Actually Pay

Fees are one of the most important variables in long-term retirement saving. They are also the area where the Old Mutual RA is most often criticised, and understanding why requires you to see the full fee structure.

The Old Mutual RA has three distinct layers of cost.

Platform or administration fee. This is what Old Mutual charges to administer the policy. On the current Max platform, this is typically a tiered percentage of your assets under management, reducing as your balance grows. Indicative ranges are often between 0.2% and 0.6% per year, though the exact schedule depends on your policy terms. Always request the official product disclosure document (PDD) for the current numbers. Don’t assume two Old Mutual clients pay the same platform fee; they often don’t.

Underlying fund management fee (TER). Each fund you invest in charges a Total Expense Ratio. These vary significantly depending on whether you choose passive or active management. A passive index tracker might charge 0.1% to 0.3% per year. An actively managed fund might charge 0.8% to 1.5% or more. Your blended TER depends entirely on which funds you choose. This layer is entirely within your control.

Adviser fee. If you use a financial adviser, their fee is deducted from your policy too, typically between 0.5% and 1.0% per year, though this is negotiable. A good adviser should add value that exceeds this cost through better fund selection, tax planning, or helping you avoid costly mistakes. But you should understand what you’re paying and what you’re getting in return. Read more about working with a financial adviser for retirement planning.

The Effective Annual Cost (EAC) is the standardised disclosure figure that combines all three layers. Always compare EACs across providers on a like-for-like basis. You’re not comparing apples to apples if one provider charges 0.8% and another charges 1.2% but you don’t know which funds are included.

Let me show you why even 0.5% in total fees matters over time.

Imagine two investors both starting with R200,000 and contributing R5,000 per month for 20 years. Both earn a gross annual return of 9%. Investor A pays a total annual fee of 1.5%. Investor B pays 2.0%. After 20 years, the difference in fees results in Investor B having meaningfully less capital, sometimes hundreds of thousands of rands less. When I model this for clients, the rand amount lost to fees often surprises them. This is why understanding your EAC is not optional.

A note on older policies: Pre-2010 Old Mutual RA policies sometimes carry surrender penalties or market-value adjustors, particularly on smoothed bonus funds. Before adjusting or cancelling an older policy, get clarity on the penalty terms from Old Mutual in writing. Often, switching to a reduced premium rather than cancelling entirely is the better short-term option. You avoid penalties but your fees drop.

Fund Options and Investment Strategy Inside the Old Mutual RA

One genuine strength of the Old Mutual RA is the range of fund categories available. Understanding your options helps you build a portfolio that matches your risk tolerance, time horizon, and values.

Smoothed bonus funds aim to deliver smoother returns by holding back some gains in good years and drawing on reserves in bad years. The trade-off is real: you give up some upside in bull markets in exchange for reduced volatility. These funds appeal to members closer to retirement who are nervous about sequence-of-return risk, a real concern that deserves careful planning. The catch is that smoothed funds often carry market-value adjustors. If you switch out during a market downturn, you may receive less than the stated fund value. This is a material risk that many investors overlook until it’s too late.

Market-linked funds include actively managed balanced funds, multi-manager funds, and passive index trackers. Multi-manager funds are managed by Old Mutual’s investment team, which blends multiple underlying managers to reduce single-manager risk. These tend to carry slightly higher fees than pure passive options but offer broader diversification.

Passive and index-tracking options are available and typically carry lower TERs, which can be significant over long investment horizons. If you value simplicity and low cost, this is worth exploring.

Shari’ah compliant options. Old Mutual does offer Shari’ah compliant fund choices within the RA wrapper. For Muslim investors who need investments that avoid interest-bearing instruments, alcohol, tobacco, and similar sectors, this matters. Verify the current Shari’ah-compliant fund lineup directly with Old Mutual, as product availability can change over time.

All funds within the RA remain subject to Regulation 28 limits. You cannot allocate more than the prescribed offshore limit to foreign assets, regardless of which fund you choose. For context on why offshore diversification matters for South Africans, read investing offshore. If you want help structuring a fund allocation that suits your stage of life, consider finding a CFP-accredited retirement planner.

Old Mutual RA vs Allan Gray, Sanlam, and Ninety One: A Side-by-Side View

The question most people ask is whether the Old Mutual RA is the best retirement annuity in South Africa, or whether a competitor offers better value. The honest answer is that it depends on what you prioritise: cost, fund access, adviser relationships, or product simplicity. There’s no one-size-fits-all winner.

Here’s an indicative comparison. All fee data is illustrative and based on publicly available information at the time of writing. Before you decide, verify current figures in each provider’s official PDD.

Allan Gray is a strong choice if you want a focused range of high-conviction actively managed funds at reasonable cost. Their RA doesn’t offer smoothed bonus funds, which makes it less suitable for very conservative members. But if you like their investment approach and want to avoid paying for options you won’t use, it’s worth considering.

Sanlam is similar in scale to Old Mutual and offers comparable breadth of options, including smoothed bonus funds and Shari’ah choices. Their adviser network is extensive, and the product complexity can be similar to Old Mutual’s. Always compare EACs carefully. Sometimes the broader range costs you more than you gain.

Ninety One suits investors who specifically want exposure to Ninety One’s fund range, which has a strong emerging markets and global equity track record. The fund selection is narrower than Old Mutual’s, but the investment quality is high.

10X Investments is the lowest-cost option on this list and a compelling choice for fee-conscious investors who want a simple, passive, long-term approach. It suits investors who are comfortable managing their own RA without adviser support and don’t need smoothed bonus funds.

Use the tool to estimate your annuity income at retirement based on your current savings rate and expected retirement age.

Honest Pros and Cons of the Old Mutual Retirement Annuity

No RA product is ideal for every investor. I’ve seen clients thrive with Old Mutual and others regret their choice. Here’s a straightforward assessment.

Pros:

Broad fund choice is a genuine advantage. The Max platform gives access to passive, active, multi-manager, and smoothed bonus funds in one place, covering most risk profiles and time horizons.

Shari’ah compliant options matter. Not all providers offer this. For Muslim investors, this is meaningful.

Smoothed bonus funds are useful if you’re within five to ten years of retirement and want to reduce short-term volatility. Old Mutual is one of the few platforms that can deliver this.

The established platform with online access means switching funds, updating contributions, and viewing portfolio values can all be done digitally. It’s not fancy, but it works.

Creditor protection comes with any approved RA. The balance is protected from creditors under the Pension Funds Act.

Cons:

Fee complexity is real. The layered fee structure (platform plus fund plus adviser) can add up to more than simpler alternatives, particularly if you choose actively managed funds and pay an adviser fee. You need to actually calculate your total cost.

Older policies carry risks that newer platforms don’t. Pre-2010 policies may have surrender penalties and opaque charges that are worth auditing before you leave them as is.

Product complexity can overwhelm investors without good adviser support. The range of options is a strength and a weakness depending on how much you know.

It’s not the cheapest option if cost minimisation is your top priority and you don’t need smoothed bonus funds. 10X Investments or a low-cost Allan Gray portfolio is likely cheaper.

Smoothed fund lock-in risk catches investors off guard. Market-value adjustors on smoothed funds mean you could lose money if you try to switch during a downturn. This deserves careful thought if you’re considering a smoothed fund.

The Old Mutual RA is not ideal for investors who want the lowest possible cost without adviser support, or for those who want exposure only to index trackers. In those cases, a pure passive provider is a better fit. For a comparison of RA structures with employer-based saving, read how provident funds compare to retirement annuities.

Who Should Consider the Old Mutual Retirement Annuity?

The Old Mutual RA suits a specific profile of investor, and being clear about that profile helps you make a better decision.

The ideal candidate is a self-employed professional or salaried employee without access to a pension fund at work, earning at least R200,000 per year, who values having access to a wide range of fund options under one roof. If you want smoothed bonus fund access as you approach retirement, Old Mutual is one of the few platforms that provides it. If you’re a Muslim investor looking for a Shari’ah compliant RA with broad platform access, Old Mutual is worth considering, though you should verify current fund availability directly.

Those who should look elsewhere include investors who put cost first and want a passive-only approach at the lowest possible EAC. If simplicity is your goal and you want a single-manager solution, you’re overcomplicating things with Old Mutual. If you’re comfortable managing your own fund selection without adviser support, 10X Investments or a direct Allan Gray RA deserve serious comparison.

If you’re already in an Old Mutual RA but you’re dissatisfied, know that a section 14 transfer allows you to move your RA balance to another approved RA provider without tax consequences. This is a formal legal process and takes time, but it’s a legitimate exit. Old Mutual must follow the prescribed legal process and cannot refuse a legitimate transfer request.

Get proper guidance before making any changes. Consider choosing a financial adviser for retirement planning or use the tool to model your retirement savings target first.

What Happens to Your Old Mutual RA When You Retire?

At retirement, your Old Mutual RA converts to a retirement benefit. You’re allowed to take up to one-third of the balance as a cash lump sum. The first R550,000 of all retirement fund lump sums you have received, across your lifetime and not just from this policy, is currently tax-free as of the 2024/25 tax year. Verify the current threshold on the SARS website, as this figure is adjusted periodically.

The remaining two-thirds, at minimum, must be used to purchase an annuity. You have two main options.

A life annuity (sometimes called a guaranteed annuity) pays you a fixed income for the rest of your life in exchange for your capital. The income is guaranteed, but your capital does not pass to your heirs. This appeals to people who want certainty and don’t want to manage investments in retirement.

A living annuity keeps you invested in underlying funds, and you draw an income between 2.5% and 17.5% of the remaining capital each year. Your capital can be inherited by your beneficiaries, but you carry the investment and longevity risk yourself. This appeals to people who want control, who believe they can manage investments, and who want to leave money to heirs.

A critical point: you do not have to stay with Old Mutual at retirement. You can take your retirement benefit and shop the market for the best annuity rate or the most appropriate living annuity platform. Compulsion to stay with the accumulation provider is a common misconception, and it costs people money. Explore the decision carefully by reading living annuity vs life annuity at retirement and use the tool to calculate what your annuity income could look like.

Frequently Asked Questions About the Old Mutual Retirement Annuity

Can I withdraw from my Old Mutual retirement annuity before retirement?

Generally, no. Under the Pension Funds Act, you cannot access RA funds before age 55, except if you emigrate formally under the old financial emigration rules, now replaced by the tax residency cessation process, if your annual contribution falls below a certain threshold and your fund value is below a specified amount, or if you are permanently incapacitated. Early withdrawal rules are strict, and tax consequences apply. For detail on understanding what an annuity is, that article covers the basics.

What is the minimum contribution for the Old Mutual retirement annuity?

The minimum monthly contribution is typically around R500 on the current Max platform, though this can vary by product version and whether you use an adviser. Lump sum top-ups are also accepted. Verify the current minimum directly with Old Mutual or your adviser, as product terms are updated periodically.

Can I transfer my Old Mutual RA to another provider?

Yes. A section 14 transfer allows you to move your RA to another approved retirement annuity provider without triggering tax. The process is regulated and typically takes several months. Old Mutual must follow the prescribed legal process and cannot refuse a legitimate transfer. Surrender penalties on older policies may apply before the transfer, so check your policy document first.

Is the Old Mutual retirement annuity Shari’ah compliant?

Old Mutual does offer Shari’ah compliant fund options within the RA wrapper, but not the entire platform operates on a Shari’ah basis. You select Shari’ah compliant underlying funds. Verify the current fund lineup and whether the platform administration itself meets your Shari’ah requirements directly with Old Mutual or a qualified Islamic finance adviser.

How do Old Mutual RA fees compare to Allan Gray or 10X Investments?

On a like-for-like basis, Old Mutual’s total cost can be higher than 10X Investments, which offers a simple, low-cost passive structure, and roughly comparable to Allan Gray, depending on the funds chosen. The key is to compare EACs across all three fee layers: platform, fund management, and adviser. You can check your retirement fund balance online and request an EAC disclosure from each provider before deciding.

What happens to my Old Mutual RA if I die before retirement?

Your nominated beneficiaries receive the fund value. The RA forms part of your estate for estate duty purposes but is not subject to executor’s fees, since it is administered under the Pension Funds Act. The trustees of the fund have some discretion in distribution, but in practice, nominated beneficiaries receive the bulk of the benefit. Update your beneficiary nomination regularly, especially after major life events like marriage or children.

The Bottom Line on the Old Mutual Retirement Annuity

The Old Mutual RA is a solid, well-established product that suits a wide range of investors, but it is not automatically the best choice for everyone. Three decisions will determine whether it’s right for you.

First, assess total cost. Get the EAC in writing across all three fee layers and compare it to at least one or two alternatives. Don’t skip this step. The difference between a 1.2% total cost and a 1.9% total cost over 20 years is the difference between a comfortable retirement and a strained one.

Second, decide whether you need smoothed bonus funds or Shari’ah compliant options. If you do, Old Mutual is one of the few platforms that can accommodate both. If you don’t, look at lower-cost alternatives.

Third, plan your retirement transition before you get there. Knowing that you can shop annuity providers at retirement, rather than staying with Old Mutual by default, can make a meaningful difference to your retirement income.

Use the retirement planning tool to model your numbers, and if you’re unsure which RA structure suits your income and goals, speak to a CFP-accredited financial adviser who can give you advice tailored to your circumstances.

This article provides general information about retirement annuities in South Africa and is not personal financial advice. Your circumstances, tax position, and goals are unique. Please consult a qualified CFP professional before making any retirement planning decisions.