Nearly 60% of income gone before the bills: South Africa's debt warning

South Africans applying for debt review are spending nearly 60% of their income on unsecured debt repayments alone, according to new data from the South African Financial Pressure Index. The index surveyed 1,577 applicants and found that the median share of net income going towards unsecured debt was 57.8%. Interestingly, even those earning over R15,000 a month were affected, with one in five debt review applicants earning above this threshold.

Median unsecured debt also increased with income, with those earning between R20,000 and R30,000 having median unsecured debt of R121,134. FinMark Trust’s FinScope Consumer South Africa 2025 Survey revealed that 48% of adults, or about 22.4 million people, were not saving at all. The South African Reserve Bank reported that household debt grew faster than disposable income in the first quarter of the year, pushing the household debt-to-income ratio to 62.2%.

Experts advise consumers to first distinguish between consistently spending more than they earn and unexpected expenses, and to examine where their money is going, distinguishing between needs and wants. An emergency fund becomes crucial when facing unexpected expenses like car repairs or medical bills. Leonie van Pletzen, CEO of the Credit Association of South Africa, emphasizes the importance of a liquid reserve to avoid turning to short-term loans when faced with unexpected expenses.

National Debt Counsellors director René Moonsamy advises prioritizing the repayment of high-interest unsecured debt and avoiding using credit for everyday expenses. He also recommends maintaining emergency savings for unexpected costs and regularly reviewing outstanding balances and repayments. Trans-50 notes that expenses change with age, with healthcare, home repairs, and car breakdowns becoming significant concerns for older consumers.