Big hopes for salary hikes in South Africa

 ·8 Apr 2024

South Africans are extremely optimistic about their finances, with many expecting salary increases this year.

According to TransUnion’s latest Consumer Pulse Survey, 72% of South Africans are optimistic about their finances over the next 12 months – the highest percentage since the category began being tracked in Q4 2020.

6% of South African respondents were pessimistic (Q4 2023: 7%), while 13% were neither optimistic nor pessimistic (Q4 2023: 12%)

76% of respondents are also expecting a salary increase during 2024.

According to global advisory firm WTW, employers in South Africa are planning to increase their budgets for pay by 6.1% in 2024, with inflationary pressure and a need to retain skills and talent being flagged as the main reasons.

A 6.1% increase comes in higher than expected annual inflation, which is anticipated to be between 4.5% and 4.7% in 2024.

WTW’s latest 2024 employment trends showed that, globally, average actual salary increases hit 5.4% in 2023 as compared to 5.0% in 2022 among organisations – with the actual increases given being higher than projections from earlier in the year.

South Africans turn positive on finances

65% of households said that they are confident that they will be able to meet their current bills and loan obligations in the coming months.

Although 35% are still expected to struggle to pay their bills and loans, it is still 7% lower than the Q4 2023 figures.

Of the 35% with struggles, 34% plan to pay a partial amount that they can afford, 33% plan to take on partial work and 30% plan to use money from savings to meet their financial responsibilities.

Lenders are also expecting 12% of this group of borrowers to refinance or renegotiate their current debt payment periods and/or interest rates.

“In addition to a feeling of overall buoyancy, the results show that consumers are responding responsibly to the prevailing macroeconomic factors by prioritising the repayment of existing debt and saving more for both the short- and long-term,” said Lee Naik, CEO of TransUnion Africa.

In total, 37% of respondents who said that the South African economy is in a recession aim to pay down debt quicker (Q4 2023: 29%). 51% also said that they are cutting back on discretionary spending to do so (Q4 2024: 47%)

In terms of savings, 19% (Q1 2024: 18%) of respondents put more into their retirement funding over the quarter, and 28% saved more in an emergency fund or stokvel (Q4 2024: 25%).

Naik said that consumers’ appetite for new credit facilities is the highest that they’ve seen since Q4 2020, with 38% of respondents expecting to apply for new credit or refine existing credit, such as property and car finance and credit cards, over the next year.

There is also a shift towards looking beyond the current challenging environment to the long term, with 21% of respondents planning to apply for a new bond facility—which will be welcomed by the residential property sector.


Read: Work-from-home under pressure in South Africa- but these jobs are still holding out

Show comments
Subscribe to our daily newsletter