One graph that shows South Africa’s sorry state of savings
Personal finance group, MyTreasury.co.za has published a graph comparing saving trends across the G20 nations – with South Africa ranking as the worst.
Data released by Old Mutual in June showed that levels of saving among working South Africans are relatively low at only 15% – but when looking at the entire population it’s as low as 3%.
The latest Investec GIBS Saving Index, meanwhile, shows the country’s savings score is at its lowest level since 1990.
But the country’s problems do not end there, the group said, with its own data showing that many of those who do manage to squirrel away some money each month are not saving wisely.
“While 16 million South Africans do have savings accounts, the fact is that they are emptier than they should be, and according to the latest SA Reserve Bank statistics, about 40% of this money sits in accounts that offer very low interest rates, if any interest at all,” MyTreasury said.
“If you have savings, you could be earning as much as 10% on your savings each year and grow your wealth faster just by switching to a higher interest paying accounts.”
It is national savings month in South Africa, and under the theme of “employer assisted saving”, companies are coming out with a host of useful tips and campaigns to get South Africans excited about saving.
Recommendations to save money range from simple lifestyle changes – like using lists when going shopping, hunting for bargains and putting money away before spending – to more long-term strategies like settling debt, setting financial goals, or creatively using your bond as a savings avenue.
According to MyTresury, South Africans struggle with saving because the savings market is opaque and complex making it “virtually impossible” to identify the highest paying savings account that best matches specific saving requirements.
“For instance, some banks offer higher rates for seniors but do a poor job of marketing this. It is difficult to find bank rate data, without comparing rates across multiple banks and products. Trying to find the best rate for your specific profile and savings preferences is even more convoluted and time-consuming.”
“Savings accounts are a great way to encourage smarter wealth management. Just about everyone has a bank account, and by urging people to see their ordinary bank accounts as tools for actively generating income, we hope to make South Africans more excited about saving,” it said.
Read: Saving vs investing – where South Africans in their 20s and 30s are putting their money
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