Photo: File
Photo: File

SA households are buckling under financial stress

By Sandile Mchunu Time of article published Jul 17, 2020

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DURBAN - South African households are buckling under the Covid-19 outbreak as 58percent of them are reported to be under financial stress, according to the latest survey by Old Mutual Savings & Investment Monitor.

The survey was conducted between May 29 and June 23, with around 1500 people taking part in the survey. It focused on how the Covid-19 outbreak has affected individuals during the economic downturn.

Lynette Nicholson, the head of research and insights at Old Mutual, said a very alarming consequence of the financial pressures South African households were experiencing was that just more than 50 percent were dipping into their savings just to make ends meet, while 37percent had fallen behind on paying household bills, and 23percent had cashed in a savings/investment policy.

“An indicator of the distress the crisis has caused is that only one in two credit card holders are able to comfortably make their repayments every month,” Nicholson said.

Another key finding was that as many as 57percent of those surveyed were earning less than at the end of February, while 40percent of those currently employed only have enough funds to survive for one month or less should they lose their jobs.

“As many as 66percent of the respondents stated that they are constantly worried about losing their job or income. Overall, satisfaction with the current financial situation is down from 6.3points in 2019 to a mean score of 5.3points out of 10points this year,” the survey revealed.

The annual survey tracked the shifts in habits and attitudes towards saving and investing of South Africa’s working metropolitan households since 2009. The survey also revealed that 43percent were taking personal loans from financial institutions, up from 21percent compared to 2019 while 19percent were taking loans from family or friends and 12percent borrowing from micro-lenders.

BUSINESS REPORT ONLINE 

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