Top 3 reasons why South Africans save

2014-07-24 11:37
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Johannesburg - South Africa may lack a savings culture, but the people are saving and they have three top priorities.

Retirement, education and emergencies are the three main reasons why people save, according to research by FNB.

FNB Savings & Investment CEO Lezanne Human said the findings of the study show these three reasons cut across income groups, but the priority for each group was different.

"If you look at people with an income of typically R200 000 annually, which is just under R17 000 a month, they have so many expenses that they have to take care of."

She said these expenses range from electricity to children's education and extended family commitments. This is the reason why they have to save for emergencies, Human said.

"You would think that's really weird that they're still saving if there is almost no disposable income left after all those expenses. But the reason you need to save for emergencies is for that safety net because when there is something that happens and you don't have that safety net, you end up going into expensive credit or debt."

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Turning to people who earn over R200 000 annually, Human said the biggest reason to save was for retirement.

She shared a scary statistic about retirement.

"One in three people can afford to not work after retirement."

From the remaining 70% of people, 50% work full-time and the other 20% part-time.

"If you look at people who are in retirement age, 40% of them are still paying off sizeable debt and that is why it is so important that we do save for retirement and why people see it as their main priority."

 - Fin24

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