Another sign South Africans earning over R30,000 are in serious trouble

South Africans who earn over R30,000 a month or more are overextending themselves to maintain their standard of living amid the rising cost of living. 

This was highlighted by research and consultancy firm Eighty20’s latest Credit Stress report for the first quarter of 2025, which highlighted similar concerns to those outlined by DebtBusters earlier this month. 

The first quarter of this year marked a concerning reversal of the encouraging trends seen at the end of 2024. 

It noted that credit behaviour has shifted due to rising living costs, global market instability, and local economic strain. 

Home loan overdue balances surged 21% year-on-year, and overdue credit card balances rose by 18%. 

Worryingly, the country’s wealthiest consumer groups hold nearly 75% of this overdue debt, which Eighty20 call the Middle Class, Heavy Hitters, and Comfortable Retirees. 

This suggests that financial stress is not limited to low-income households but is also deeply affecting top earners, even after a year that saw three interest rate cuts and a slight cooling of inflation.

Eighty20 further highlighted that South Africa’s credit market continues to expand despite these warning signs. 

The number of credit-active consumers increased by 2% year-on-year, while the number of credit products rose by 4%. 

Total outstanding loan balances hit R2.56 trillion, up R127 billion from the previous year, mainly driven by credit card and retail credit growth. Overdue balances climbed to R208 billion, now accounting for 8.1% of all outstanding debt. 

Additionally, for the first time in two years, the number of loans in arrears also increased, growing by 353,395 accounts to 17.97 million.

Much of this growth is being fuelled by unsecured and retail credit, which make up the majority of new loans being taken out, even though they represent less than half of all new loan value. 

“Every month, up to two-thirds of all new loans fall under retail credit, with unsecured loans making up about a third,” the report said. 

The report found that South Africans now spend a larger share of their income on debt repayments. The overall instalment-to-net income ratio rose to 28%—meaning nearly a third of take-home pay goes towards servicing debt. 

This ratio is significantly higher among the wealthiest consumers. Eighty20 refers to this group as Heavy Hitters, earning over R30,000 per month and up to R120,000, spending 48% of their net income on debt instalments. 

The middle class under pressure

The Middle Class, which includes earners from R8,000 to R30,000 per month, spend 37%. These are the only segments whose debt servicing costs exceed the national average.

Comfortable Retirees are also under pressure, with 21% of their income going toward debt, while the Mass Credit Market spends 19%.

Within the middle class, Eighty20 noted a significant spike in credit activity. The group took out over one million new loans in the first quarter, 734,081 of which were unsecured.

Although the overall unsecured loan balance fell slightly to R132 billion, overdue balances on unsecured loans and credit cards rose by 2% and 5%, respectively. 

Home loans remain the biggest contributor to total balances, rising to R996 billion, with overdue balances on these loans also increasing by 5.8%.

In addition, just over 5,000 individuals were new to credit in this high-earning segment, yet they accounted for 15% of the total new loan balances—an indication of how quickly debt builds up for new entrants. 

Altogether, the segment’s loan balances rose by 2.5% in the quarter, now accounting for 65% of the total credit market.

Eighty20 said that much of the financial strain is because of the continued rise in the cost of living. 

“In addition to local pressures, external factors such as global volatility following the US election and tariff policies under President Trump have compounded the challenges,” it siad. 

“The rand weakened against major currencies in the first quarter, while petrol prices rose 3.9% due to higher international oil prices.”

These concerns are also reflected in revised economic forecasts. Both Moody’s and the Bureau for Economic Research have lowered their 2025 GDP growth expectations from 1.8% to 1.5%. 

“The economic slowdown, combined with price hikes and a weakened currency, is making it harder for South Africans to keep up, even those considered financially well-off,” Eighty20 added. 

DebtBusters, in its own recent data, pointed out that households are increasingly relying on personal loans and payday loans to bridge financial gaps. 

Over the past decade, electricity tariffs have risen by 135%, petrol by 88%, and inflation has compounded by 52%, all while average nominal incomes are now 1% lower than they were in 2016.

According to DebtBusters, the real impact of inflation has left consumers feeling as though they’re taking home 53% less than they did in 2016. 

Even as inflation slows, the damage has been done. Both reports clearly show that financial stress is no longer confined to lower-income brackets.