Share

South Africans are saving, but not for education and retirement – research

accreditation

South Africans are adopting better financial habits and saving, but their savings aren’t catering for long term goals, research revealed.

According to the Old Mutual Savings and Investment Monitor which tracks financial attitudes and behaviour of SA’s working metro population, those surveyed said that they put 14% of their income towards saving, compared to 15% recorded in 2017.

“However, we need more action to see this translate into results… the reality is that their formal savings do not seem to cater for longer term goals, such as education, life, death or disability cover, or retirement,” said Lynette Nicholson, research manager at Old Mutual.

More respondents are starting to set financial goals, an improvement from 69% in 2016 to 76% in 2018. More are planning their finances for five to 10 years ahead and feel optimistic that things will get better in the next six months, said Nicholson.

But only 43%, down from 46% in 2016, of those surveyed are saving for their children’s education. Lower income households show the sharpest decline in this regard, down from 29% in 2016 to 18%.

The research shows that one out three individuals born before 1965 do not have formal provision for retirement.

READ: SARB governor Kganyago, other top SA financial brains share their savings habits

Of the respondents 61%, up from 53% recorded in 2017, save using stokvels, however the average contributions are declining especially among higher income households.

The research also showed that respondents in all income categories are less likely to be able to cope with a financial emergency.

The increasing cost of living is also affecting households with 67% spent on living expenses, up from 62% in 2017.

“There seems to be an awareness of the need to cut back more on expenses such as DStv, food and groceries,” the report read. This cost cutting is more prevalent in upper income groups.

About 41% of respondents said finances are a source of stress in their homes.

READ: How to budget for your wedding

Nicholson said that South Africans need to commit to responsible financial habits and improve their financial understanding.

* It's National Savings Month. Do you have a successful savings plan or story to tellShare it with us now and help others to also become Savings Heroes. For more on savings, visit our special Savings Issue.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
24.02
-0.5%
Rand - Euro
20.51
-0.2%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.6%
Platinum
900.15
+0.4%
Palladium
1,000.00
-0.2%
Gold
2,210.45
+0.7%
Silver
24.60
-0.2%
Brent Crude
86.09
-0.2%
Top 40
68,142
+0.7%
All Share
74,329
+0.6%
Resource 10
56,957
+2.3%
Industrial 25
103,635
+0.4%
Financial 15
16,485
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders