How South Africans are surviving financially through lockdown

New research from consumer credit reporting agency, TransUnion, shows that the Covid-19 pandemic is creating a new reality as its impact has stretched to consumers of all generations and income levels.

Using data collected during the middle of April, in the midst of an extended lockdown period in South Africa, TransUnion showed that the financial impact on households remains extensive;
with financial concerns the most prevalent among Millennials and Gen X.

The agency had run the same poll in the first week of April. Comparing the two sets of data, it found that a slightly higher  percentage of South Africans were negatively impacted financially (81% vs 79%) by the middle of the month.

Nearly a third (31%) of impacted consumers had their work hours reduced – similar to week one.

The proportion of impacted consumers who are concerned about paying their bills remained fairly consistent at 88% vs 89% previously.

Respondents said they will be short on their bills and loans about R7,000 on average in the near future, while the length of time they estimate until they cannot pay increased from 6.2 weeks to 6.7 weeks in the second poll.

The data showed no change in the number of impacted respondents that have lost their job (10%) as a result of the Covid-19 pandemic.

Paying bills

In South Africa, 66% of Millennials in the survey have dependent children living at home, compared to 48% for other generations.

Millennials who have seen their household incomes negatively impacted also are having more pronounced problems with certain debt obligations.

Of consumers who are concerned about paying their bills, 45% (down marginally from 46%) report  that they will not be able to pay their utilities (electricity, water, etc.), 45% (up from 42%) will not be able to make  their rent repayment and 38% (down marginally from 39% last week) report that they will not be able to pay  their mobile phone bill.

“Millennials are the first generation to be fully immersed in mass-market digitalisation and are savvy at securing credit,” said Carmen Williams, director of research and consulting at TransUnion South Africa.

“While Gen Z can say the same, the big difference is that many Millennials are more settled in their careers and are beginning to approach the peak earning period of their lives.”

Game plan

A greater percentage of consumers financially impacted by the pandemic have reached out to companies  they have accounts with to discuss payment options (45% of consumers compared to 40% in  week one).

More than a third (35%) of respondents said they planned to use their savings to pay current bills  -up significantly from 29%.

A smaller number (22%) said they would borrow money from a friend or family member.

A quarter of respondents said they do not know how they are going to pay their bills or loans (down from 27% in week one) and 32% will only pay a partial amount that they can afford.

Read: What South Africans are doing to get through lockdown, financially

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How South Africans are surviving financially through lockdown