Warning for South Africans making more than R20,000 per month

Based on recent statistics, South Africans are facing more and more financial difficulties, especially those who make R20,000 or more a month. According to our research for the second quarter of 2024, people in this income range have the greatest difficulty repaying their debts.

In South Africa, middle-class to upper-class incomes are already under a great deal of strain from high interest rates, even if rate reductions are expected in September 2024. Due to rising borrowing costs, people making between R20,000 and R35,000 as well as those making more than R35,000 have had a greater burden repaying debt.

This income group’s overall debt levels have increased by 23% during 2016, indicating a major impact on their financial security from rising housing and other living expenses. The debt-to-income ratio for people in this bracket is 128%, which is lower than the highest income category but still shows significant financial distress.

For those in the top income bracket, bond repayments make up a sizable 42% of their debt, highlighting the strain that growing real estate prices have had on South African households.

Consumers are depending more and more on unsecured credit, and this trend has gotten worse as a result of rising interest rates and high inflation. The number of people completing debt counselling has increased tenfold since 2016, indicating a strong increase in the demand for debt management services in recent years.

Kind Regards

CPI Payroll Support Team