This is how many South Africans say they can’t pay their bills right now
The current global Covid-19 pandemic is creating major economic and financial distress for consumers across the globe, and many jobs in the South African economy are already being impacted or at risk due to drastic demand shifts.
TransUnion, a consumer credit reporting agency conducted research to better understand consumers’ perceptions and expectations for how this rapidly evolving situation is affecting their financial situation and subsequent ability to pay their bills.
TransUnion conducted an online survey of 1,100 adults in South Africa, between 1-3 November 2020.
Despite further relaxing of lockdown level 1 restrictions, 79% of South Africans continue to be financially impacted by Covid-19. This is up two percentage points from October, but lower than the highest level (84%) experienced in June.
Only 11% of consumers indicated that their household finances are going as planned through 2020, while 65% say their finances are worse than planned.
Concern among impacted consumers about their ability to pay bills and loans remains high at 85%, with 29% expecting to run into a shortfall within one month (+3 percentage points).
How much is your budget shortfall?
On average, R7,424 is the amount consumers who were impacted expect they will be short when paying bills or loans.
Consumers who were impacted expect they will not be able to pay their bills or loans in 8.4 weeks.
Worryingly, South Africans are still cashing out investments and retirement savings to maintain cash flow through the crisis, with 42% of respondents indicating this is how they will pay current bills and loans.
However, South Africans do remain positive about the future. When asked about their expectations going forward, 69% of impacted consumers indicate they are optimistic, 14% neither optimistic nor pessimistic, and 17% pessimistic about the future.
What has changed in your household budget during the Covid-19 pandemic?
TransUnion’s data shows that most South Africans have cut back on discretionary spending, with the highest proportion (43%) cancelling existing memberships or subscriptions to save costs.
Reducing retirement contributions, severance package apayouts and additional use of credit are some of the other popular ways South Africans are trying to make up for the shortfall.
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