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Research shows that SA consumers can’t pay their debt

by | Dec 7, 2020 | Personal Finance

Consumer credit reporting agency TransUnion recently released research which shows that Covid-19 is still affecting the ability of South Africans to pay their bills.

TransUnion conducted an online survey of 1,100 adults in South Africa, between 1-3 November 2020.

The survey revealed the following:

  • 79% of South Africans continue to be financially impacted by Covid-19.
  • This is up two percentage points from October, but lower than the highest level (84%) experienced in June.
  • Only 11% of consumers indicated that their household finances are going as planned through 2020.
  • 65% say their finances are worse than planned.
  • Concern among impacted consumers about their ability to pay bills and loans remains high at 85%.
  • 29% expecting to run into a shortfall within one month.
  • On average, R7,424 is the amount consumers who were impacted expect they will be short when paying bills or loans.
  • Consumers who were impacted expect they will not be able to pay their bills or loans in 8.4 weeks.
  • South Africans are still cashing out investments and retirement savings to maintain cash flow through the crisis.
  • 42% of respondents says that this is how they will pay current bills and loans.

 

It isn’t all negative:

  • 69% of impacted consumers indicate they are optimistic going forward,
  • 14% are neither optimistic nor pessimistic
  • 17% are pessimistic about the future.

 

Other takeouts:

TransUnion’s data also shows that most South Africans have cut back on discretionary spending, with the highest proportion (43%) cancelling existing memberships or subscriptions to save costs.

Reducing retirement contributions, severance package and payouts and additional use of credit are some of the other popular ways South Africans are trying to make up for the shortfall.

Options:

Debt counselling is a safe, viable option for consumers who are employed, but struggling with monthly debt repayments.

For more information on debt counselling and the process of debt review, fill out our contact form and NDA will be in touch with you shortly.

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