Johannesburg - Two out of three consumers believe they have no
alternative but to get into debt, the latest Old Mutual Savings and
Investment Monitor has found.
"This equals the highest recorded measure for this
sentiment during the Savings and Investment Monitor's history," the
company said on Monday.
The sentiment was accompanied by a significant increase in indebtedness, researchers found.
Personal loans from financial services providers rose from 11% in November 2011, to 16% in July 2012.
In November 2011, results indicated that South Africans
were starting to get to grips with their finances and were trying to
rein in their debt.
The context of the latest results was recessionary
pressures locally and globally, and political uncertainty and conflict
in some regions.
In South Africa, there had been sharp increases in
petrol, energy and food costs - all necessary items - and households
were feeling the pinch.
Gautengers had some respite when e-tolls were put on hold, but worries about the future affect "loom large".
According to the report, there had been a shift away from "panic" and people were trying to pay off debt.
As a result, savings as a percentage of household
income had increased, most evident among lower-income earners, even
though it was off a low base.
However, the proportion of metro households saving more
(31%) was still outweighed by those that said they were saving
The drop off in credit card penetration seen in
November 2011 had been maintained, but people were still just paying off
the minimum balance required.
The drop off in other (non-card) short- to medium-term credit, seen in November 2011, reversed.
Higher-income consumers had increased their take-up of car finance and overdraft facilities.
Credit extension in the form of personal loans and hire purchase had grown in the middle- and lower-income brackets.
Researchers mentioned the "vulnerable" position of single mothers, in particular.
They appeared to be lavishing money on their homes and
children, often at the expense of long-term savings for themselves, and
were neglecting providing for their own retirement.
Of the mothers polled, 56% were single mothers and half received no money from their children's fathers.
Fifty three percent of them had no retirement plan, believing it was more important to save for their children's education.
They assumed that by funding education, their children
would look after them later, or they felt that the state should play a