South Africans are surviving on debt, with many putting at least half of their incomes towards repayments every month while others are simply not coping \u2013 and it’s about to get worse with price hikes for medical aid and electricity coming next month. <\/p>\n\n\n\n
The Experian Consumer Default Index<\/a> (CDIx), which measures the rolling default behaviour of South African consumers with Home Loans, Vehicle Loan, Personal Loan, Credit Card and Retail Loan accounts, has seen a deterioration from 3.97 in Q4 2022 to 4.68 in Q4 2023 \u2013 a relative change of 18%.<\/p>\n\n\n\n As of the end of 2023, South African households had close to R2 trillion in outstanding debt, with R25.8 billion in default.<\/p>\n\n\n\n Additionally, Eighty20\u2019s report<\/a> shows that the overall instalment-to-net-income ratio for all South Africans is 47%.<\/p>\n\n\n\n Debt levels are the highest for the middle class, at 79% of income going to instalments (up by nearly 28% in just over two years), followed by the Heavy Hitters (the wealthiest top 5%) at just over 61%.<\/p>\n\n\n\n Despite this, all South Africans are in for more financial pain as medical aid and electricity rate hikes kick in on 1 April 2024. <\/p>\n\n\n\n Electricity<\/strong><\/p>\n\n\n\n Starting in April, South African households will witness a significant increase<\/a> in their monthly electricity bill as residential Homepower rates will increase by about 12.7% across the board.<\/p>\n\n\n\n In December 2023, the High Court of South Africa rejected the requests for a judicial review of the revenue decision and tariff approval made by The National Energy Regulator of South Africa (Nersa) regarding Eskom\u2019s fifth MultiYear Price Determination (MYPD5) application for the 2023\/24 and 2024\/25 fiscal years.<\/p>\n\n\n\n The judgement followed applications by the Democratic Alliance (DA) and the South African Local Government Association (Salga) to review the Nersa decision on Eskom\u2019s MYPD5 revenue application.<\/p>\n\n\n\n The High Court found that \u201cwhen all is considered and the detailed and extensive reasons furnished by Nersa is compared with the attacks on its decisions, none of the review grounds pass muster,\u201d the court said.<\/p>\n\n\n\n This means Nersa\u2019s approved 18.65% increase in electricity prices for 2023 and 12.74% hike effective April 2024 will stand.<\/p>\n\n\n\n The two price hikes represent a 33.8% electricity price increase over the past two years.<\/p>\n\n\n\n According to MyBroadband’s calculations<\/a> \u2013 depending on which tariff schedule and usage \u2013 households can expect to pay between R168 and R676 more per month on electricity from next month. <\/strong><\/p>\n\n\n\n Medical aid <\/strong><\/p>\n\n\n\n Like electricity, medical aid schemes also increased their fees for 2024, starting April 2024.<\/p>\n\n\n\n
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