5 money worries that are stressing out middle-class South Africans
Sanlam has released its annual retirement Benchmark Survey for 2017, focusing on the financial wellness of employees in the workplace – and the worrying amount of financial stress apparent in South African homes.
The survey – which covered 1,317 well-educated professionals, with 60% earning more than R300,000 per annum – found that 70% middle class workers all experienced some form of financial stress.
“The research shows that financial stress impairs the quality of our lives and diminishes our ability to be productive at work,” said Viresh Maharaj, CEO of Sanlam Employee Benefits: Client Solutions.
“This is our middle class – the spine of our economy, our tax base and our hope for the future. And they are stressed. We believe that the findings point to a dire need for financial coaching and increased employer involvement in the financial wellness of employees.”
The survey found that:
- Nearly half of the respondents find themselves with a budget deficit a few times a year where their income is less than their expenditure;
- The primary source of stress for 55% of respondents comes from their short-term debt, while 41% worry that they won’t have enough set aside for unanticipated emergencies;
- Just over a tenth of respondents said that they are just simply not coping with their financial stress;
- 20% of respondents said they have to borrow from friends and family to make ends meet;
- 60% indicated that they are not making provision for their medical aid premiums in retirement.
A third of respondents said they cope with their debt by reducing expenditure.
Potential solutions
“The starting point to address many of the issues is to gain a better understanding,” said Trurman Zuma, chief executive of Sanlam Personal Finance: Savings.
“While the level of understanding is at an all-time high due to the combined efforts of the media and providers – it is still too low. Our people need help. In this context, help means advisors who are able to work with the middle class to educate and help coach them towards consistently displaying the right behaviours and making better decisions.”
Zuma noted that while just over 80% of the respondents indicated that they value financial advice, only 52% of respondents actually had any form of financial advisors.
Another possible approach is to discuss issues of debt directly through the workplace, said Maharaj.
“Access to and affordability of quality advice are issues across the middle class and more so for blue collar workers – but this can be addressed via the mechanism of the employer,” said Maharaj.
“Workplace based financial wellness programmes provide the opportunity for employers to address the drivers of their employees’ financial stress at scale – and in an inclusive manner.”
He noted that 60% of respondents indicated that they would be interested in such programmes with another 20% being open to such initiatives. Respondents expressed an appetite for such programmes to include access to financial advisors, financial literacy training and budgeting tools.
Read: 1,000 SA families are losing their homes every month to crushing debt
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