{"id":852979,"date":"2026-03-08T11:00:00","date_gmt":"2026-03-08T09:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=852979"},"modified":"2026-03-06T17:29:05","modified_gmt":"2026-03-06T15:29:05","slug":"south-africans-earning-more-than-r180000-a-year-in-trouble","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/852979\/south-africans-earning-more-than-r180000-a-year-in-trouble\/","title":{"rendered":"South Africans earning more than R180,000 a year are in trouble"},"content":{"rendered":"\n

New data shows that South Africans earning over R180,000 a year are accessing more credit but increasingly defaulting on their repayments, which is not sustainable.<\/p>\n\n\n\n

This is according to the Eighty20\u2019s latest Credit Stress Report, which highlighted that over\u2011indebtedness continued to increase in the fourth quarter of 2025. <\/p>\n\n\n\n

The report showed that while higher-income earners continue to access large amounts of credit, defaults and overdue balances are rising across multiple income segments.<\/p>\n\n\n\n

According to the report, over-indebtedness worsened in the final quarter of 2025, with several indicators pointing to growing pressure on household finances. <\/p>\n\n\n\n

\u201cA few metrics painted a worrying picture. These are the sustained rise in the number of defaulters and a steady accumulation of overdue balances, both of which appear to be accelerating rather than stabilising,\u201d the report said.<\/p>\n\n\n\n

While credit uptake typically rises in the fourth quarter due to seasonal spending, the latest data suggested that the increase in borrowing is accompanied by worsening repayment behaviour.<\/p>\n\n\n\n

Total open loans grew by more than one million during the quarter, rising 1.9% to 55 million nationwide.<\/p>\n\n\n\n

At the same time, outstanding balances increased by R44 billion, up 1.7% to a total of R2.66 trillion.<\/p>\n\n\n\n

However, the share of consumers falling behind on their payments also increased. The report found that 40% of credit-active South Africans are now in default\u2014defined as being three or more months in arrears on at least one loan.<\/p>\n\n\n\n

\u201cThe number of defaulters ticked up marginally, and the percentage of loans in arrears increased slightly, marking the first increase in this proportion since 2023 Q1,\u201d the report noted.<\/p>\n\n\n\n

Even more concerning is the rapid growth in overdue balances. The total value of overdue debt increased by R12 billion in the quarter alone (a 6% quarterly rise).<\/p>\n\n\n\n

This also represented an increase of more than 12% year-on-year to reach R224 billion. Overdue balances now represent 8.4% of total outstanding debt.<\/p>\n\n\n\n

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

Some income groups are in trouble<\/h2>\n\n\n\n

\u201cThis rapid growth is concerning and highlights widespread financial stress across segments, including what the report calls middle-class workers, heavy hitters, and even seniors,\u201d Eighty20 said.<\/p>\n\n\n\n

One of the key groups highlighted in the report is what it describes as \u201cMiddle Class Workers\u201d.<\/p>\n\n\n\n

Eighty20 describes this group as the roughly 4.1 million credit-active adults with an average personal income of about R15,000 per month (R180,000 annually) and household income between R8,000 and R30,000.<\/p>\n\n\n\n

Credit usage among this group continues to grow. The number of credit-active middle-class workers increased by 2.5% quarter-on-quarter to 3.7 million individuals, collectively accounting for 13.1 million active loans.<\/p>\n\n\n\n

Of the 1.4 million new loans taken out by this group in the quarter, 74% were personal loans. Personal loans now account for 25% of their total credit balances, while home loans make up 36%.<\/p>\n\n\n\n

However, repayment stress is also rising in this segment. Overdue balances climbed 7.7% year-on-year to R88.2 billion, while 42% of individuals in the group now have at least one loan in default.<\/p>\n\n\n\n

Higher-income earners\u2014referred to in the report as \u201cHeavy Hitters\u201d\u2014are also showing signs of growing financial pressure.<\/p>\n\n\n\n

These consumers represent the top 5% of earners, with average personal incomes of around R42,000 per month (R504,000 annually), ranging from R30,000 to more than R120,000.<\/p>\n\n\n\n

The number of credit-active heavy hitters increased by 7% year-on-year to reach 2.3 million individuals.<\/p>\n\n\n\n

During the quarter, this group originated roughly 820,000 new loans, a 34% increase from the previous year.<\/p>\n\n\n\n

Home loans make up the largest share of their debt burden, with outstanding home loan balances rising 7% year-on-year to R1 trillion. However, overdue balances are also climbing sharply. <\/p>\n\n\n\n

The total value of overdue debt in this segment increased by 21% year-on-year to R59 billion, driven by increases of 25% in credit card arrears, 21% in home loan arrears, and 19% in personal loan arrears.<\/p>\n\n\n\n

Older South Africans are also not immune to the trend. The report noted strong growth in the number of \u201cComfortable Retirees\u201d who are actively using credit.<\/p>\n\n\n\n

This group expanded by 10% year-on-year to reach 1.5 million individuals. During the quarter, they opened 233,000 new loans\u2014a 35% annual increase.<\/p>\n\n\n\n

Personal loans dominate borrowing among retirees, making up 70% of new loans in the quarter. <\/p>\n\n\n\n

According to the report, this suggests that many retirees are using credit to cover everyday living costs rather than investing for the long term.<\/p>\n\n\n\n

Across all income groups, the share of income going toward debt repayments remains significant. <\/p>\n\n\n\n

In the fourth quarter, credit-active South Africans spent an average of 29% of their net income servicing debt.<\/p>\n\n\n\n

The burden is particularly heavy for higher earners. Heavy hitters allocate 48% of their monthly income to instalments, while middle-class workers spend about 37%.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

New data shows that over\u2011indebtedness continued to grow in South Africa, and some income brackets are worse off than others. <\/p>\n","protected":false},"author":92,"featured_media":826181,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[21247,4771,17573,853],"class_list":["post-852979","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-credit-stress-report","tag-debt","tag-eighty20","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852979","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\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=852979"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852979\/revisions"}],"predecessor-version":[{"id":853040,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852979\/revisions\/853040"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/826181"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=852979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=852979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=852979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}