Almost 40% of South Africans expect to miss a bill payment according to TransUnion.
Image: Towfiqu Barbhuiya
South Africans are adapting how they manage their finances in response to continued pressure from inflation, high interest rates and job market instability, with many shifting from short-term survival to more forward-looking financial planning.
This is according to TransUnion’s second quarter Consumer Pulse Study, which surveyed 922 adults between 5 and 25 May. The data shows that about a fifth of consumers reported a decline in household income during the period, while 38% said their income had increased. Despite nearly 39% indicating they may miss at least one bill or loan payment in the near future, three quarters are still optimistic their earnings will rise over the next year.
FinMark Trust’s 2024 Financial Inclusion Report, released this May, also presents concerning information. An estimated 10 million South Africans are over-indebted, with 37% of formal credit borrowers facing repayment issues, FinMark found.
Spending patterns have changed in response to the current economic environment, TransUnion’s report found. More than half of respondents said they had reduced non-essential spending on areas such as entertainment, dining out and travel. Many are also paying off debt faster, saving more through emergency funds or stokvels, and 37% intend to increase retirement or investment contributions.
“At TransUnion, we believe these shifts represent not just resilience, but growth,” said Ayesha Hatea, director of research and consulting at TransUnion. “South Africans are taking ownership of their financial journeys and in doing so, they’re laying the groundwork for lasting stability and inclusion.”
Hatea added that people are “not simply reacting to pressure, they’re taking charge, rebalancing their finances and protecting their future”.
Much of this shift is being driven by younger consumers. South Africans aged 18 to 28 and those between 29 and 44 are more likely to apply for credit, regularly check their credit reports, and use digital safety tools like multi-factor authentication.
“Younger South Africans are embracing financial tools with growing confidence,” said Hatea. “They’re more comfortable with digital platforms, increasingly aware of how their financial choices affect their long-term goals, and, as a result, are more proactive about managing their credit.”
Although 92% of consumers believe access to credit is important for achieving their financial goals, only 36% plan to apply for new credit in the next year. That figure has remained stable since the first quarter. TransUnion said this cautious approach is tied to uncertainty around job security, income and the affordability of repayments.
The survey found that credit cards, personal loans and buy now pay later options remain the most commonly used forms of unsecured credit. Just 20% of respondents are looking into vehicle or home loans.
Nearly half of those who initially considered taking credit changed their minds due to high borrowing costs, concerns about income, poor credit history or because they found alternative funding sources.
TransUnion’s findings indicate that, while economic conditions remain challenging, more South Africans are adjusting their behaviour to improve their financial position over the longer term.