While South Africans have historically struggled with savings, several recent developments have impacted the financial landscape, though with mixed implications for long-term consumer financial health.

• The new two-pot retirement system allows easier early access to retirement funds, easing short-term pressures but potentially undermining long-term savings. Meanwhile, gambling has gained popularity, with gross gambling revenue rising 30% between 2020 and 2023, driven by sports betting and online platforms, sapping disposable income.
• On the upside, low-cost investment platforms like EasyEquities, now embraced by major banks, have democratised investing by enabling access to shares, ETFs, and crypto.
• Cryptocurrency adoption is also accelerating, with over $1.2 billion in transactions in Q1 2025, a 40% year-on-year increase, offering an alternative to staid unit trusts.
• Informal savings mechanisms, such as stokvels and burial societies, and home-based savings remain deeply embedded, serving around 18 million people.
• From a macro-economic point of view, South Africans are looking to recover from high interest rates and inflation over the past few years, with stilted economic growth and employment remaining stubbornly low. In this environment, disposable income remains very constrained

❝ At the first quarter of 2025, the Household Saving Rate in South Africa decreased to -1.20 percent from -1.10 percent in the fourth quarter of 2024.

Bringing the savings numbers closer to home, or should we say household, at the first quarter of 2025, the Household Saving Rate in South Africa decreased to -1.20 percent from -1.10 percent in the fourth quarter of 2024.

This negative savings rate indicates that, on average, households are spending more than they earn, dipping into savings or relying on credit to finance consumption.  The global average is around 10%, with countries like South Korea (35.2%) and Sweden (25.4%) significantly higher, and the United States (4.8%) and Japan (5%) below the average along with South Africa, where this rate has been negative since the end of 2022.

The FinScope Survey, a nationally representative study available through the Eighty20 Data Portal, echoes this reality. The survey reveals that 25% of respondents are not currently saving, with this trend particularly pronounced among lower-income individuals.

❝ Consumers typically have one of two savings strategies: “saving up” to fund purchases or “saving down” by spending first, typically via credit and repaying later.

Consumers typically have one of two savings strategies: “saving up” to fund purchases or “saving down” by spending first, typically via credit and repaying later. MAPS data shows nearly half of consumers believe it’s better to take a short-term loan than use personal savings, while only 21% disagree with this statement.

This mindset varies by generation: Boomers and Gen X are more inclined to borrow, while younger consumers prefer using their own savings. However, these preferences often reflect financial necessity. Families, burdened by higher living costs, especially food, are more likely to favour borrowing. FinScope data confirms this strain, revealing over one-third of respondents borrow to buy food.

Credit access is also uneven, with 95% of formal credit held by individuals over 35, highlighting structural barriers for younger and lower-income consumers.

There are many reasons why South Africans don’t save, we unpack a few with some data points to make it clear.

The cost of living

South African incomes have battled to keep pace with inflation. The average take-home pay slowed for the third consecutive month in May 2025, according to the latest BankservAfrica Take-home Pay Index (BTPI).  While incomes have recovered steadily for the past two years, the Bankserv data shows that real take home pay (inflation adjusted) in 2023 was at the same rand amount as 2017.

The post Covid world has seen inflation rise to unprecedented levels, resulting in significant price increases for core commodities like food and transportation costs which form the bulk of household expenses.

The Income & Expenditure Survey (2022/2023) illustrates how South Africans allocate their expenditure, with four categories accounting for three-quarters of all spending:

High levels of indebtedness:

The quarterly Eighty20 Credit Stress Report highlights the impact of economic forces on the South African consumer, with a particular focus on consumer credit behaviour.

The 2025 Q1 report found:

• The total loan value continues to rise and currently stands at roughly R2.56trn
• The percentage of loans in arrears is roughly 35%
• The overall proportion of credit active individuals with 1+ loans in default is around 42%
• Unsecured loans dominate credit holdings among lower-income earners
• The overall instalment to net income ratio for all South Africans was 28%, but higher income individuals are spending as much as 50% of their income servicing debt.

❝ Unemployment in South Africa remains critically high at 32.4%, following a sharp spike during the COVID-19 pandemic.

Post Covid 19 effects

Unemployment in South Africa remains critically high at 32.4%, following a sharp spike during the COVID-19 pandemic. The economy shrank nearly 7% in 2020, one of the steepest contractions in the democratic era and only regained pre-pandemic output by mid-2022.

Income inequality remains the highest globally, with a Gini coefficient between 0.63 and 0.65, reflecting extreme disparity. The pandemic widened this gap, as wealthier households rebounded faster than low-income groups.

Power supply issues have also undermined economic growth and eroded investor and public confidence, but South Africa has been on a better footing this past 18 months, with limited load shedding since March of 2024. This has provided much needed relief to households and businesses.

“South Africa’s savings crisis is a symptom of broader economic challenges rather than simply a matter of individual financial discipline,” concludes Eighty20. “Addressing this crisis will demand comprehensive solutions that tackle income inequality, improve financial literacy, reduce the cost-of-living pressures and continuing to create more accessible and effective formal savings mechanisms.”

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