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IOL News
2 days ago
- Business
- IOL News
Financial stress: 70% of South Africans are worried about money
Regionally, people living in the Western Cape are now the most financially concerned, surpassing Gauteng. Image: Towfiqu Barbhuiya Anxiety over money may be at levels last seen in 2022, yet 70% of South Africans are still experiencing financial stress compared to the past two years. Despite this decline, money concerns still impacts daily life substantially. Among those experiencing financial stress, 91% felt it affected their home life, while 73% reported an impact on their work life, and a further 73% said it affected their health. This is according to the fourth annual DebtBusters Money-Stress Tracker. The survey polled over 27,000 respondents who are not in debt counselling during May and June 2025. It found that 70% of respondents experienced money stress in 2025. This marks a decrease from 78% in 2023 and 75% in 2024. This overall reduction in stress is attributed to fewer national crises, such as loadshedding, reduced inflation, and people starting to better manage their finances, allowing them to look beyond short-term survival. Yet, Benay Sager, executive head of DebtBusters, said, more than 90% of South Africans with unsustainable debt do not proactively seek professional support like debt counselling. 'This underscores the ongoing importance of stress-management programmes, financial education, and awareness campaigns that address stigma and promote early intervention,' Sager said. 'It also highlights the need for innovative solutions to deal with money stress, particularly those that help consumers stretch their money further.' The survey revealed significant debt repayment pressures. Almost two-thirds of respondents allocated around a third or more of their after-tax income to debt repayment, with almost half spending over 40% of what they earn paying back what they have borrowed – a level considered unsustainable. People aged 45 or older are under the most severe debt-repayment pressure, with 60% having unsustainable levels of debt and all respondents earning over R20,000 a month also face considerable pressure and often take on debt they can't afford. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Yet, the number and value of civil debt cases in South Africa have declined, according to the latest data from Statistics South Africa for May. The total value of civil judgements recorded for debt decreased by 8%, which the agency linked to smaller amounts owed from money lent and fewer written promises to pay a stated sum to a specific person. Analysed with the help of psychologist Andrea Kellerman, the results also showed a shift in how South Africans manage money stress. While people tended to seek better jobs or start a side hustle in 2022 and 2023, and debt counselling was preferred in 2024, the 2025 survey indicates a growing emphasis on entrepreneurial efforts, multiple income streams, and financial independence. Women reported higher levels of financial stress than men, with almost three out of four female respondents saying they suffered money worries. Women are around 10% more stressed about finances overall and are 20% more stressed about work life, home life, and health compared to men. Short-term concerns continue to dominate for the financially stressed, with the top two being running out of money before the end of the month and struggling to pay off monthly debt. A third of respondents reported actively cutting back on monthly spending, down from 43% in 2022, suggesting that savings fatigue has set in. The impact of interest rate increases, while still significant, has subsided compared to 2023 and 2024. Middle-aged respondents (35 – 44 years) were the most financially stressed. Concerns about retirement increased for those aged 45 and older compared to 2024, indicating that this age group is now able to look beyond immediate short-term concerns. Lower-income groups are the most concerned about the impact of interest rate increases or unexpected expenses. While electricity costs are an elevated concern across all income groups compared to 2024, retirement worries are more pronounced in the upper-income brackets. Regionally, people living in the Western Cape are now the most financially concerned, surpassing Gauteng, which reported the most money stress in 2024. The Western Cape is also where most people worry about unexpected expenses and retirement. Smaller provinces, such as the Northern Cape, Limpopo, and Mpumalanga, saw significant increases in concerns about electricity costs and interest rates. IOL
News24
2 days ago
- Business
- News24
These are SA's most financially stressed people — survey
The people who are feeling the most stressed about their finances include women, those earning between R10 000 and R20 000, and people over the age of 45. These were the results of the 2025 DebtBusters Money Stress Tracker, which surveyed 27 000 people about how financial stress is affecting their lives. Overall, 70% of those surveyed said they were feeling stressed about their finances. While this is an improvement from the 78% recorded in 2023, it is a very high figure. The survey respondents were not under debt review but had registered on the DebtBusters website. This suggests that the survey may be biased towards those in financial difficulty who are searching for information on managing their debt. Nevertheless, it is concerning that nearly half of those surveyed spend more than 40% of their after-tax income on debt repayments. According to Benay Sager of DebtBusters, consumers should not spend more than 30% of their take-home pay on debt repayments, with an amount above 40% considered unsustainable. Caught in a sandwich Those aged 45 to 54 are the only age group that is feeling more stressed now than in 2022, and they have the highest levels of debt. Intuitively, the higher debt levels would make sense as they are the age group most likely to have mortgage and car repayments, but even so, the debt levels are alarming. Sixty percent of this age group have debt repayments in excess of 40%. This age group is most likely to find itself in the 'sandwich generation', supporting both adult children and ageing parents. This is also the age when a person would be starting to worry about their financial ability to retire. They would be facing choices between paying off debt and contributing to retirement funds. Women juggle more roles The survey found that women suffer significantly more stress than men when it comes to their finances and even more so when it comes to work, home life and their health. Commenting on these results, psychologist Andrea Kellerman says women carry multiple roles such as caregivers, professionals, mothers, and daughters, and tend to worry about the wellbeing of their entire household. Women are particularly concerned about running out of money before the end of the month and meeting their debt obligations. Nearly half of the mothers in South Africa are raising children on their own, which could also be contributing to their stress levels both financially and as caregivers. Higher income, higher debt While one would expect lower-income earners to suffer higher financial stress, the Money-Stress Tracker found that those earning above R20 000 were far more indebted. Nearly 60% of those earning between R20 000 and R35 000 were spending more than 40% of their income on debt repayments, with one in four people spending in excess of 50% of their income on debt. This is the segment that can access credit more easily and is more likely to have car and house finance. The rapid increase in interest rates between 2022 and 2024 would have had a significant impact on their monthly cash flow. Saving fatigue Despite these high levels of financial stress, the number of people taking active steps to control their finances has declined by over 10%. The number of people trying to cut back on their spending has declined since the peak in 2023, which Sager says could be an indication of 'savings fatigue'. It could also mean that people feel they have cut back as much as possible and have no further savings to make. When asked what is stopping them from taking action, most people feel stuck or do not know who to trust to help them, while younger people are more likely to feel too embarrassed to reach out for help. There also seems to be a disconnect or lack of awareness around their personal finances. Many who spend more than 40% of their income on debt repayments do not believe that they are over-indebted or that they need help. The most important message to those who are feeling stressed about their finances is to take action. It starts with understanding your current financial situation and writing down all your financial obligations and day-to-day spending. While it may feel like a daunting task, in most cases, once you have a proper view of your financial situation, you will be able to put a plan in place. Simply having a plan and a sense of control will reduce your stress levels. Once your stress levels reduce, you will be in a better position to make improved financial decisions, rather than reacting in the moment, and signing up for another expensive loan to get by. If you believe you are over-indebted and, even with a proper budget in place, you are unable to meet your debt obligations, then you should consider debt counselling rather than defaulting on your debt obligations.
Daily Maverick
24-06-2025
- Business
- Daily Maverick
Inflation is easing, but debt is up
Inflation may be slowing, but consumers are drowning in debt and defaulting on essentials. Although inflation is slowing, South Africans are still drowning in debt. Two-thirds of South Africa's credit-worthy consumers who took part in a Debt Rescue survey stated that they cannot repay their debt because of macroeconomic pressures beyond their control. And DebtBusters' Debt Index for the first quarter of this year reported numbers just as bad – 91% of consumers who applied for debt counselling in the first quarter had a personal loan and 37% had a one-month loan, also known as a payday loan. Over the past nine years, electricity tariffs have increased by 135%, the price of petrol has risen by 88% and the compound effect of inflation is 52%. As a result, consumers who applied for debt counselling in Q1 2025, on average, needed 69% of their take-home pay to service debt. The most vulnerable consumers, taking home R5,000 or less per month, use 76% of their income to repay debt. Those earning R35,000 or more spend 77% on servicing debt. The ratios for these income groups are the highest since DebtBusters started analysing the data in 2016. 'It's clear that while consumers may feel a little more positive, personal loans, especially one-month loans, remain a lifeline for many because income has not kept pace with rising expenses,' says Benay Sager, executive head of DebtBusters. Debt Rescue CEO Neil Roets says 41% of people have indicated that they have defaulted on their credit cards over the past year, and 30% have missed payments on retail store accounts. 'These are the two most commonly used forms of credit for day-to-day expenses because they are existing facilities that they have access to, which are now becoming increasingly unaffordable while providing the only lifeline for many consumers,' Roets notes. The Debt Rescue survey outcomes show that 24% of those polled cited defaults on personal loans, with 31% attributing this to unexpected expenses and 21% to loss of employment. 'A total of 65% of those surveyed said that the current economic conditions are significantly affecting their ability to repay debt,' Roets said. 'These numbers reflect the reality of life right now for millions of South Africans who are unable to keep up with paying their rent, car payments, groceries and school fees, and are defaulting on all sources of debt and credit. This is not a case of overspending on luxuries, but simply a means to financially get by,' warns Roets, who has been sounding the alarm for well over a year now. The elephant in the room is, of course, the many millions more who are not credit compliant and hanging on by a very thin thread. The latest statistics show that 25% of the population live below the food poverty line, and more than 30 million people live below the upper-bound poverty line of about R1,634 per month. According to ISS African Futures, the percentage of South Africans living in poverty has hovered at about 62% in recent years. On the current growth trajectory, it is likely to inch down marginally to 60% over the next decade. The number is largely the result of escalating food, energy, water and fuel costs, driven by an economy in deep trouble, which has led to the unsustainable unemployment level of 32.9% of the population. 'It is only possible to reduce unemployment with a rapidly growing economy, and the figures showing economic growth of just 0.1% in the first quarter of 2025 fail to inspire much hope,' says Roets. 'Although 27% of people polled by Debt Rescue said they are compelled to take on part-time jobs or freelance to increase their income simply to meet the monthly needs of their families and themselves, many are simply not able to extend their working hours to accommodate earning an extra income, and taking on debt becomes the only other alternative,' says Roets. DebtBusters was able to show that compared with 2016: Today's consumers have 53% less purchasing power. Although the impact of inflation has recently subsided, average nominal incomes of incoming cohorts are now 1% lower than 2016 levels, and cumulative inflation over the nine years is 52%. There's better news for those taking home R35,000 or more. For them, nominal income has increased by 11% since 2016. Consumers in most income bands spend 25% of their disposable income, after debt repayments, to pay for water, electricity, rates and transport. For people in lower-income groups, who spend a larger portion of their income on food, food inflation has meant they have experienced 2% to 4% more inflation over the past few years. Top earners have unsustainable levels of unsecured debt. On average, unsecured debt levels are 34% higher than nine years ago, but for people taking home R35,000 or more, it has increased 90% – the highest ever. DM This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
IOL News
19-05-2025
- Business
- IOL News
More South Africans are relying on personal loans as cost of living soars
More South Africans than ever are using personal loans to make up the shortfall between income and the rising cost of living. Image: TungArt7/Pixabay Although consumer confidence has improved and the rollout of the 'two-pot' retirement system has provided some financial relief, more South Africans than ever are using personal loans to make up the shortfall between income and the rising cost of living. The newly released DebtBusters Q1 2025 Debt Index shows that a staggering 91% of consumers who sought debt counselling in the first quarter of the year reported having a personal loan. DebtBusters executive head, Benay Sager, said it is clear that while consumers may feel a little more positive, personal loans, especially one-month loans, remain a lifeline for many, because income has not kept pace with rising expenses. The past nine years have seen staggering increases in essential costs: electricity tariffs have skyrocketed by 135%, petrol prices have surged by 88%, and cumulative inflation hovers at 52%. As a result, consumers who pursued debt counselling in Q1 2025 needed, on average, a daunting 69% of their take-home pay to service their debts—the highest percentage observed since 2017. Strikingly, those earning R5,000 or less monthly utilise an overwhelming 76% of their income to pay down debt, while individuals with earnings above R35,000 allocate an astonishing 77% for the same purpose. These figures represent the highest debt-servicing ratios recorded since DebtBusters began analysing consumer behaviour in 2016. Comparing today's consumers to those in 2016 reveals a concerning decline in purchasing power, which is now 53% lower. Although inflationary pressures appear to have lessened, the average nominal incomes for incoming cohorts remain 1% below 2016 levels. Conversely, there is a silver lining for top earners, as those making R35,000 or more have experienced an 11% increase in nominal income since 2016 for the first time in several years. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Unfortunately, the burden of debt remains pervasive across most income brackets. Consumers are diverting 25% of their disposable income—after servicing their debts—toward essential expenses such as water, electricity, rates, and transport. In the wake of food inflation, many families have been forced to forgo crucial insurance and assurance cover. Lower-income groups particularly feel the pinch, facing 2% to 4% higher inflation over recent years, predominantly due to the rising cost of staple food items. Top earners, too, grapple with unsustainable levels of unsecured debt. On average, this demographic's unsecured debt has soared by 34% over the last nine years, with a staggering 90% increase observed among those earning R35,000 or more—the highest level recorded to date. Sager notes that interest in debt counselling has been 'a bit muted' compared to previous years, attributing this to a mix of uncertainty about the macroeconomic landscape, access to retirement funds, and negative perceptions surrounding debt counselling. Nevertheless, he stresses that debt counselling remains the best option for consumers seeking to restructure their debts effectively. 'While the average interest rate for unsecured debt has decreased from an eight-year high to 25.3%, under debt counselling, it can be reduced to approximately 2.5% per annum,' Sager explains. This reduction not only allows consumers to repay cripplingly expensive debt more swiftly but also mitigates the burden of vehicle debt and balloon payments by negotiating interest rates on financed vehicles down from 14.9% a year to a more manageable level. The trend towards proactive debt management is beginning to change the narrative, as the number of consumers completing debt counselling has increased elevenfold since 2016. In Q1 2025, those who received clearance certificates managed to repay over R700 million to their creditors, signalling a positive shift in financial responsibility. Amidst a growing concern, interest in online debt management tools has surged by 6% compared to the same period last year, with subscriptions to DebtBusters' proprietary online tools, Debt Radar and Debt Sustainability Indicator, surpassing a remarkable 1 million. IOL
The South African
19-05-2025
- Business
- The South African
Personal loans hit record high in South Africa as cost of living bites
A growing number of South Africans are turning to personal and payday loans to stay afloat, as the rising cost of living continues to outpace stagnant incomes. A new report from DebtBusters reveals that a staggering 91% of individuals applying for debt counselling in early 2025 had at least one personal loan – the highest percentage ever recorded. DebtBusters' head, Benay Sager, warned that this trend signals a deepening financial crisis, especially among middle- and upper-income earners who are now under increasing pressure. 'Basically, eight out of every 10 rands earned by top-income earners applying for debt counselling are being spent on debt repayments,' Sager said. 'That's the highest we've ever seen. It reflects the severe financial strain facing even those who are traditionally better off.' Although some indicators – like consumer confidence – have shown slight improvement, the financial burden remains immense. Essentials such as electricity, fuel, and food have seen sharp price hikes, while household incomes have remained virtually flat. One of the report's most surprising findings is that debt is growing fastest among the country's highest earners. Traditionally seen as more financially resilient, this group is now increasingly reliant on borrowing to maintain their lifestyles or cover basic expenses. 'This group is under severe pressure,' Sager emphasised. 'The fact that such a high-income bracket is so leveraged shows how widespread the impact of the cost-of-living crisis has become.' The report paints a sobering picture of South Africa's economic health. With many households resorting to short-term borrowing at high interest rates, financial experts warn that without interventions – such as improved wage growth, energy cost control, and inflation relief – more South Africans could be pushed into unsustainable debt cycles. As debt becomes the only option for many South Africans to survive rising costs, financial advisors are urging consumers to prioritise budgeting, seek professional debt advice early, and avoid high-risk lending solutions where possible. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
