85% of South Africans need help financially - Survey
A new survey has found that a shocking 85% of all South Africans needed help either financially, emotionally or both as a result of the Covid-19 pandemic.
- A further 55% required financial assistance but had no access to credit
- An additional 96% were stressed about their health, finances or both.
Neil Roets, CEO of Debt Rescue, who commissioned the poll, said he was deeply distressed by the findings.
“We have known for some time that things were bad but the results of this survey just bowled me over. It showed clearly and emphatically that virtually the entire population of this country are in deep trouble and have no idea where or how help is coming from.”
Roets said one of the finding that made him sit up and take notice of the evolving crisis was the fact that only 26% of the respondents reported that they had successfully applied for a payment holiday while 51% said they had no savings to fall back on.
“The fact that 85%of consumers polled in the survey said that their finances had been directly impacted by Covid-19 showed that most of us were in the same boat.
“We have seen a huge increase in the number of enquiries from folks who wanted to go under debt review.
The fact that only 11% of those polled believed they could pay normally after their payment holiday ended shows emphatically that there is a major problem in the offing, Roets said.
The 25-basis point drop in the prime lending rate would bring some relief to especially consumers who were repaying outstanding bonds. The bulk of those savings would be offset by the expected 50 cents a litre increase in the fuel price,” Roets said.
Other findings of the survey were:
- 26% of people successfully applied for payment holidays
- 45% have been affected by either retrenchment, temporary layoff or salary reductions
- 30% have no idea what the impact will be on their salaries
- 16% were able to rely on credit
- 51% had no savings to fall back on
- 36% had to dip into savings to make ends meet in this time for health, finances or both
- 74% keep up to date with news as they believe it is important
- 16% felt the news was becoming too much to handle
- 23% were not back at work yet, or weren’t sure when they would be able to return to work
Roets said it was imperative to get the workforce back to work.
“While we fully understand that some issues are beyond the reach of the government, it is nonetheless important to get people back to work.
He said the combination of an expected multibillion-rand revenue collection shortfall and the Covid-19 economic meltdown spells trouble for the state’s ability to sustain society and should be seen as a ticking time bomb that could lead to widespread social unrest.
“The unemployment rate could go as high as a record 50%. This means a smaller tax pool and less revenue for the government to spend on development and social programmes such as education, health and social grants, he said.
“We fully understand and agree that social distancing has to be maintained and even tightened to save lives but there is no sugar-coating the fact that consumers are heading for disaster.”
Roets said it was imperative for consumers to cut spending wherever possible and to repay high interest-bearing debts as quickly as possible.
“There are not going to be any bailouts from government simply because they have run out of money. The private sector is in business to make money so don’t expect any bailouts from them either,” he said.
The one advantage that consumers had was the fact that they were protected by very progressive legislation in the form of the National Credit Act.
“The process of debt counselling that was introduced more than a decade ago makes it possible for companies such as Debt Rescue to negotiate with creditors to obtain a longer repayment period with smaller repayments without losing assets like homes and motor vehicles.