Annual consumer inflation reached a 13-year high in South Africa, increasing to 7.8% in July, StatsSA data showed, leaving consumers in a vulnerable position financially amid soaring living costs.<\/p>\n
Data from FNB estimates that it takes a mere five days for middle-income consumers in the country to spend up to 80% of their monthly salary.<\/p>\n
This suggests that the average middle-income consumer, earning between R180,000 \u2013 R500,000 per annum, survives on 20% of their monthly salary for more than 20 days in a month.<\/p>\n
In addition, salaried middle-income consumers with secured and unsecured credit spend, on average, 30% of their income on unsecured credit and 35% on secured credit, the lender said.<\/p>\n
Putting a figure on the average profile of a middle-class person\/family in South Africa is difficult, with economists and expert institutions attributing various factors to reach the magic number.<\/p>\n
Working on economic averages – by no means a pointer to the middle class, but rather, a starting point – shows the average monthly earnings<\/a> paid to employees in the formal non-agricultural sector was at around R23,500<\/strong> in February – or R282,000 annually – the low-end of FNB’s suggested figure for a middle-income consumer in the country. <\/span><\/p>\n Earnings of around R500,000 annually equate to approximately R41,000 per month.<\/p>\n The latest salary data from the BankservAfrica Take-home Pay Index shows that the average salary paid to employees slipped to R14,340<\/strong> in July.<\/p>\n Monthly costs<\/strong><\/p>\n Buying a house is one of the biggest purchases you’ll make in your lifetime, while a vehicle is also likely to be a cost burden over an extended period of time. As a rule of thumb, you should be setting aside 30% of your salary for home loan repayments.<\/p>\n Ooba notes that the average bonded property in South Africa has climbed to around R1.43 million. With a 10% deposit, that amounts to a monthly repayment of R11,579<\/strong> at an interest rate of 9%. For first-time buyers, that average price drops to around R1 million – R8,098<\/span> <\/strong>each month.<\/p>\n It must be noted that in many cases, middle-income families accrue wealth through a double income and share financial responsibilities, including a bond.<\/p>\n Vehicle financing company Wesbank recently noted that the average value of new cars financed in June was R352,208. Without a deposit, the estimated monthly repayment on that amount is R7,163<\/strong> over a 72-month repayment term, and at an interest rate of 13%. With a 10% deposit, that number drops to R6,460<\/strong>.<\/p>\n Data from consumer credit reporting agency TransUnion<\/a> shows that more people are dipping below the R300,000 in the second-hand market. Finance of between R250,000 and R300,000 would still see a monthly repayment fee of between R5,111<\/strong> and R6,115<\/strong>, or even lower with a deposit.<\/p>\n Other substantial monthly living costs include education. Financial services firm Sanlam loosely puts the cost of education at the following:<\/p>\n Curro, for example, claims an average annual tuition fee is R64,764<\/a>. Its fees differ widely based on its numerous locations and offerings It can cost from around R6,000 pm\/R73,000 \u2013 to in excess of R9,000 pm\/ R108,000 annually as is the case of Curro Waterfall in Midrand.<\/p>\n Data from DebtBusters showed that stagnant incomes, coupled with rising inflation, meant that middle-class South Africans have 34% less purchasing power in 2022 compared to 2016. By adding petrol, electricity, levies, groceries, and medicine, to your monthly bill, one can see how a salary can disappear within days.<\/p>\n Medical aid is seen as a luxury in South Africa, with fewer than 20% of the population believed to be covered by a medical aid scheme, as is having a retirement vehicle. More than a third (35%) of middle-class South Africans are not putting any of their salary towards their retirement savings, a BusinessTech poll shows.<\/p>\n The poll of 2,702 readers showed that the majority of respondents (61%) are allocating 10% or less. By comparison, 23% of readers are putting away more than 20% of their salary every month towards retirement.<\/p>\n Here’s how much money South Africans are saving for retirement<\/a><\/p><\/blockquote>\n\n