{"id":770860,"date":"2024-05-07T10:03:37","date_gmt":"2024-05-07T08:03:37","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=770860"},"modified":"2024-05-07T10:13:00","modified_gmt":"2024-05-07T08:13:00","slug":"big-trouble-for-south-africans-earning-more-than-r20000-per-month","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/lifestyle\/770860\/big-trouble-for-south-africans-earning-more-than-r20000-per-month\/","title":{"rendered":"Big trouble for South Africans earning more than R20,000 per month"},"content":{"rendered":"\n

Debt levels for South Africans earning more than R20,000 a month are reaching record levels, where households are now spending two-thirds of their income paying off debt.<\/p>\n\n\n\n

The latest DebtBusters Debt Index for the first quarter of 2024 shows that persistently high interest rates and inflation \u2013 especially food inflation – continue to erode consumers\u2019 disposable income, while a lack of any meaningful economic growth is constraining salaries.<\/p>\n\n\n\n

The quarterly analysis of data from debt-counselling applicants also found that demand for debt management increased, with debt-counselling enquiries rising by 22% and the use of online debt management services up by 30% compared to the same period last year, the group said.<\/p>\n\n\n\n

While historically debt problems have been more pronounced in the mass market, middle and upper income bands have also falling into dangerous territory due to prevailing conditions.<\/p>\n\n\n\n

South Africans’ debt-service burden is now incredibly high, with households using 62% of net income to repay debt. <\/p>\n\n\n\n

The situation is worse amongst higher-income earners. <\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

The debt-to-income ratio for people taking home more than R20,000 per month is 127%, while it is 172% for those earning R35,000 or more. These ratios are at or close to the highest ever, DebtBusters said.<\/p>\n\n\n\n

While average unsecured debt levels are up 14% compared to 2016\u2014this is lower than recent quarters and is a welcome trend\u2014top earners have unsustainably high levels of unsecured debt, it said. <\/p>\n\n\n\n

“What is concerning is that for people earning R35,000 and more, unsecured debt levels are 41% higher. This is in line with inflation and indicates that without meaningful salary increases, these consumers are using debt to supplement their income<\/strong>.”<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

The average interest rate for unsecured debt is now at an eight-year high of 25.7% per annum.<\/p>\n\n\n\n

According to DebtBusters’ data, purchasing power in South Africa has diminished by 47%.<\/p>\n\n\n\n

Nominal incomes are 1% lower than in 2016, while the cumulative impact of inflation over the eight years is 48%. <\/p>\n\n\n\n

“While some income groups saw real increase in incomes, on average the trend was slightly downwards,” it said.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n
\n\n\n\n

Read: Food security warning for South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africans are being hit hard by high interest rates and high inflation – and debt levels are rising to record levels.<\/p>\n","protected":false},"author":10,"featured_media":700011,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9876],"tags":[26],"class_list":["post-770860","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/770860","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=770860"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/770860\/revisions"}],"predecessor-version":[{"id":770870,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/770860\/revisions\/770870"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/700011"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=770860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=770860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=770860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}