How many people say they won’t last a month without a salary in South Africa

Data from the Old Mutual Savings and Investment Monitor survey (OMSIM) shows that South Africans have learned a hard lesson over the last two years, and more have begun to put money aside in the form of an emergency fund.

However, despite the increased buffer in savings, a significant number of people would struggle financially not long after losing their monthly income.

The OMSIM tracks shifts in financial attitudes and behaviour of the country’s working population. In its report, it asked respondents how long their household could survive without a salary.

During the peak of Covid-19 in 2020 and 2021, when many employees were retrenched or furloughed, Old Mutual recorded some of the worst rates of imminent distress, reaching a high of 40% of households not being able to survive a month in 2020.

Pressure on household savings eased as businesses returned to normality, and respondents in 2022 expressed more confidence in their emergency fund. The poll showed that only 29% of respondents would not survive a month without a salary.

Old Mutual said that those who have the funds to last more than three months without a salary up from 27% in 2020 to 39% in 2022.

In effect, the savings buffer has reached pre-Covid levels, the data shows.

How long can you survive without a salary?


A key highlight of the survey is that attitudes towards saving have shifted over the last two years.

To cope with an unforeseen financial emergency, 37% of respondents now say they are developing an emergency savings fund. However, savings rates have remained low, and for many, their overall position remains precarious, said Old Mutual.

A recurring theme in Old Mutual’s findings was that the past two years of financial strain stemming from the pandemic changed consumers’ approach to money, with a clear effort to keep expenses under control.

The poll showed that 27% of respondents reported prioritised having a buffer, while a further 23% have become more aware of spending and have become more cautious with their money.

“Positive changes were made and have impacted the attitudes towards savings – something that will stand them in good stead while they face the new challenges presented by 2022,” said Old Mutual’s head of knowledge and insights, Vuyokazi Mabude.

Consumers are under increasing financial strain. Continual rolling blackouts paired with record high fuel prices and food inflation have taken their toll on savings accounts. Data from StatsSA (20 July) revealed that consumer inflation has accelerated to the highest rate in over a decade with the cost of living becoming unbearable for some South Africans.

According to Old Mutual, 52% of respondents said that they dip into their savings to make ends meet each month while close to 40% of respondents borrow from either friends or family.

Read: Warning signs as wealthy South Africans take strain from the higher cost of living

Source link

Leave a Reply

Your email address will not be published.