The latest DebtBusters Money-Stress Tracker has set alarm bells ringing for middle class South Africans, whose debt is hitting crisis levels.
South Africa’s middle class is caught in the perfect storm of overindebtedness, where they are expected to pay off loans at 15-year high interest rates while the rising cost of living eats away at shrinking salaries.
The report showed that South Africans’ levels of financial stress have remained high for the past three years and that 70% of those under 55 said they worry about finances. Generally, consumers are advised not to spend more than 30% of their take-home pay on debt repayment—at most 40%.highlighted that up to 62% of South Africans earning over R20,000 have unsustainable debt levels. Of these, 46% spend 50% or more on debt repayments.
Standard Bank has cautioned that many South Africans earning over R25,000 struggle to save money for emergencies. High borrowing costs at a 15-year peak and elevated inflation are also affecting South African consumers.
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