Budget 2026: Retirement & tax free saving limits raised for first time

Finance Minister Enoch Godondwana’s Budget 2026 brings much-needed relief and savings opportunities for South African consumers, from tax adjustments to social grant increases. Enoch Godongwana’s Budget on Wednesday has been called a stability-focused one with a return to fiscal discipline. Outlining what the Budget means for consumers,Hayley Parry, money coach and facilitator at 1Life’s Truth About Money shares the following: Government has withdrawn the previously proposed R20 billion in tax increases.

There is no VAT hike and no broad-based income tax shock. That protects disposable income at a time when households are already stretched. Personal income tax brackets and rebates have been fully adjusted for inflation, after two years of no inflationary-linked adjustments.

This prevents “bracket creep”, where people pay more tax simply because of inflationary salary increases. It protects take-home pay, particularly for middle-income earners. “This gives consumers breathing room — but breathing room is not the same as financial progress.

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The smart move now is to use this stability to reduce debt or build up your emergency fund; not expand lifestyle costs.” The annual tax-free investment limit increases from R36,000 to R46,000, and retirement contribution limits are raised from R350k to R430k. “This is a powerful opportunity — but only for those who use it. The gap between financially active households and financially excluded households will widen unless we prioritise financial education and access to low-cost savings tools.” Old age and disability grants increase by R80; the child support grant rises by R20.

The Social Relief of Distress grant continues. This provides direct support to over 26 million beneficiaries and offers some cushioning against food inflation. “For households relying on social grants, every rand matters.

Even small increases can make a meaningful difference — especially when supported by accessible financial tools, fair credit options and practical financial education.” Fuel levies rise in line with inflation. Higher petrol and diesel costs will filter through to transport, food and goods prices. This affects every consumer, directly or indirectly.

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