{"id":513290,"date":"2021-08-20T15:00:49","date_gmt":"2021-08-20T13:00:49","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=513290"},"modified":"2021-08-20T15:17:16","modified_gmt":"2021-08-20T13:17:16","slug":"these-income-brackets-owe-the-most-debt-in-south-africa-right-now","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/513290\/these-income-brackets-owe-the-most-debt-in-south-africa-right-now\/","title":{"rendered":"These income brackets owe the most debt in South Africa right now"},"content":{"rendered":"

New data from debt counsellor, DebtBusters, shows that earners in all income brackets in South Africa are worse off when comparing total debt exposure to annual net income.<\/p>\n

“It is clear that the debt situation of SA consumers has further deteriorated recently. In the absence of a meaningful increase in real income growth, South African consumers continue to supplement their income with more unsecured credit,” said DebtBusters chief executive Benay Sager.<\/p>\n

“Average loan size has increased, and the number of debt obligations (open accounts) has decreased \u2013both indicating that consumers are seeking help sooner.”<\/p>\n

Those taking home between R10,000 – R20,000 per month need to spend 6o% of their monthly net income on repaying debt, the group\u2019s Q2 2021 debt index showed.<\/p>\n

By comparison, those who earn over R20,000 per month need to spend 62% of their monthly net income on repaying debt.<\/p>\n

\"\"<\/a><\/p>\n

“Consumers consistently need to spend around 60% of their take-home pay to service their debt before coming to debt counselling,” Sager said.<\/p>\n

“More alarmingly, the debt-to-income ratio for all income bands has increased this quarter and is now at its highest levels ever: 122% across all income bands and 152% for those taking home R20,000 or more.”<\/p>\n

Sager said that unsecured debt levels were on average 32% higher than 2016 levels, while for those taking home R20,000 or more, the unsecured debt levels were 49% higher.<\/p>\n

This is a direct result of erosion of net income (take-home pay) \u2013 consumers need to supplement this erosion with unsecured credit.<\/p>\n

What people owe money on<\/strong><\/p>\n

DebtsBuster said that the nature of debt is mostly stable, except a growing portion is from financed vehicles.<\/p>\n

The group said that vehicle debt has increased in the last few years, indicating that more consumers with assets, vehicles, in particular, are seeking financial assistance.<\/p>\n

Banks make up two-thirds of debt (67%), while there has been a slight increase (9%) in the share of unsecured debt over the past year.<\/p>\n

\"\"<\/a><\/p>\n

In the second quarter, enquiries about debt counselling increased by 18% compared to a year ago. Sager attributes this to the after-effects of the nationwide lockdown and a narrowing of consumers\u2019 borrowing ability.<\/p>\n

He said that debt levels had increased substantially. The number of open accounts has decreased for consumers applying for debt counselling, indicating that consumers are seeking help sooner.<\/p>\n

The pool of consumer borrowing has also shrunk, as supported by National Credit Regulator data, which indicates that the average unsecured loan size has increased by 46%. The number of loans has decreased by 31% over the last four years.<\/p>\n

\n

Read: Warning over major retirement change for South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

New data from debt counsellor, DebtBusters, shows that earners in all income brackets in South Africa are worse off when comparing total debt exposure to annual net income.<\/p>\n","protected":false},"author":10,"featured_media":173703,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[13165,26],"class_list":["post-513290","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-debtbusters","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/513290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=513290"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/513290\/revisions"}],"predecessor-version":[{"id":514826,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/513290\/revisions\/514826"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/173703"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=513290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=513290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=513290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}