Money and Markets

Here's how South African households are currently trying to save money

Business Insider SA
  • South Africans are increasingly worried about paying their bills, as the coronavirus pandemic hits their income.
  • The majority of households have been forced to change their budgets in response, a new survey by SA's largest credit bureau shows.
  • Cancelling memberships and subscriptions has been one of their first options.
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The majority of South Africans are worried about paying their bills amid the coronavirus crisis - and their household budgets are starting to reflect that, according to a recent survey by SA's largest credit bureau, TransUnion. 

"Although the lockdown restrictions are starting to ease, the pandemic continues to create major economic and financial distress for the South African economy and consumers alike," says Lee Naik, chief executive officer of TransUnion Africa.

The ongoing research by the company shows that 16% of respondents have lost their jobs. This is up from 10% in the first week of April when the first survey was conducted.

It also showed that more than 83% of consumers have been negatively impacted financially and 91% of these are concerned about their ability to pay bills and loans.

Source: Transunion

According to the report, millennials are still the hardest hit.

South Africans are most concerned about rent and utility payments. To preserve the little cashflow they do have, many are making partial payments against existing debts and bills, according to the report.

The amount that consumers felt they will be short in paying bills decreased by 6% from R7,542.90 to R7,098.40.

Household budgets have had to change to accommodate income shortfalls. Some 60% of people who have been negatively affected by the crisis have curbed their discretionary spending, while many have cancelled subscriptions. 

How SA households have changed their budgets during the Covid-19 pandemic. Source: Transunion

Some are borrowing against their savings to close financial shortfalls, while others are cutting back on their retirement savings.

20% of those surveyed said they had made payment holiday arrangements  - mostly on car loans, personal loans and credit cards - with their lenders and service providers.

Compiled by Bombi Mavundza

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