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Johannesburg - Governments and employers are shifting greater financial risks onto individuals, according to Deputy Minister of Finance Nhlanhla Nene.
That, in his view, has made increased levels of financial literacy among consumers a matter of urgency in his view.
"Support for state-sponsored pension funds is declining globally and there has been a shift away from defined benefit to defined contribution pension funds," he said.
He wants financial institutions to spend more of their resources on developing products that will enourage consumers to save.
At the close of National Savings Month, Nene expressed the wish that financial institutions would help South Africans to keep the importance of saving in the spotlight.
“People who do not focus on their future financial needs save less," he said.
"Micro-loans and other debts occupy people’s attention, because lenders are always reminding them about debt repayments."
The result is that people are more aware of debt than savings.
Financial institutions should help consumers to save their way out of financial woes rather than helping them borrow to finance excessive consumption, according to Nene.
"The majority of workers are not aware of the risks they face now or will face in the future," he said.
"This reinforces the need for continued education and access to financial knowledge."
There is evidence that financially literate adults have a higher probability to save and plan for their retirement.
Increased knowledge also enables individuals to shop for cheaper debt, and to manage this debt better.
With this in mind, the South African Savings Institute is partnering with like-minded sector players such as Old Mutual and Metropolitan to reach out to rural and semi-urban communities across the country.
The aim is to deliver financial literacy workshops for the rest of the year. The workshops will equip consumers with basic knowledge on household budgets, managing debt and information on how to choose the right savings products based on their financial situations.
The first workshop was held in July, and these events continue to be well attended by the communities in which they are held.
- Fin24
That, in his view, has made increased levels of financial literacy among consumers a matter of urgency in his view.
"Support for state-sponsored pension funds is declining globally and there has been a shift away from defined benefit to defined contribution pension funds," he said.
He wants financial institutions to spend more of their resources on developing products that will enourage consumers to save.
At the close of National Savings Month, Nene expressed the wish that financial institutions would help South Africans to keep the importance of saving in the spotlight.
“People who do not focus on their future financial needs save less," he said.
"Micro-loans and other debts occupy people’s attention, because lenders are always reminding them about debt repayments."
The result is that people are more aware of debt than savings.
Financial institutions should help consumers to save their way out of financial woes rather than helping them borrow to finance excessive consumption, according to Nene.
"The majority of workers are not aware of the risks they face now or will face in the future," he said.
"This reinforces the need for continued education and access to financial knowledge."
There is evidence that financially literate adults have a higher probability to save and plan for their retirement.
Increased knowledge also enables individuals to shop for cheaper debt, and to manage this debt better.
With this in mind, the South African Savings Institute is partnering with like-minded sector players such as Old Mutual and Metropolitan to reach out to rural and semi-urban communities across the country.
The aim is to deliver financial literacy workshops for the rest of the year. The workshops will equip consumers with basic knowledge on household budgets, managing debt and information on how to choose the right savings products based on their financial situations.
The first workshop was held in July, and these events continue to be well attended by the communities in which they are held.
- Fin24
