{"id":883547,"date":"2026-11-10T12:00:00","date_gmt":"2026-11-10T10:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=883547"},"modified":"2026-11-10T11:17:18","modified_gmt":"2026-11-10T09:17:18","slug":"people-earning-over-r420000-a-year-are-in-trouble-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/883547\/people-earning-over-r420000-a-year-are-in-trouble-in-south-africa\/","title":{"rendered":"People earning over R420,000 a year are in trouble in South Africa"},"content":{"rendered":"\n

New data shows that people taking home more than R35,000 and R50,000 a month spend almost all their income on debt repayments.<\/p>\n\n\n\n

According to DebtBusters\u2019 Q3 2026 Debt Index, consumers in this income bracket need 97% of their take-home pay to service debt, while their total debt is equivalent to three times their annual net income.<\/p>\n\n\n\n

The findings highlight the extent of financial pressure faced by South Africans across income groups, including those earning more than R420,000 a year.<\/p>\n\n\n\n

The Debt Index, which has tracked consumer borrowing behaviour for more than a decade, is based on information supplied by people applying for debt counselling.<\/p>\n\n\n\n

In the third quarter of 2026, consumers seeking debt counselling needed an average of 65% of their take-home pay to service their debt.<\/p>\n\n\n\n

Although this is an improvement over the 73% peak recorded in the first quarter of 2021, it remains a significant financial burden.<\/p>\n\n\n\n

For those earning more than R50,000 a month, the situation is considerably worse. Their debt-to-income ratio is 300%, the highest among any income group, despite having fallen from a peak of 340% in the third quarter of 2024.<\/p>\n\n\n\n

According to Benay Sager, executive head of DebtBusters, the data points to growing financial pressure among consumers who might otherwise be considered relatively comfortable earners.<\/p>\n\n\n\n

The pressure is also reflected in the type of credit South Africans are using. Banks accounted for 65% of the debt held by new debt counselling applicants in the third quarter, the lowest proportion recorded by DebtBusters.<\/p>\n\n\n\n

This is down from a peak of 75% in the third quarter of 2023. However, non-bank lenders, including retailers, microlenders, unsecured lenders, and online lending platforms, accounted for 15% of applicants’ debt.<\/p>\n\n\n\n

This is almost double the 8% recorded in the third quarter of 2024 and the highest proportion since the Debt Index began.<\/p>\n\n\n\n

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

Groceries, electricity, and petrol price increases are hitting hard<\/h2>\n\n\n\n

Sager said the shift suggested that consumers are increasingly turning to alternative lenders when they cannot access traditional bank credit or need money quickly.<\/p>\n\n\n\n

A record 64% of new debt counselling applicants had a one-month payday loan, compared with 57% a year earlier. Furthermore, 96% had a personal loan.<\/p>\n\n\n\n

The average number of credit agreements per applicant has also reached 8.8, its highest level since the index began.<\/p>\n\n\n\n

“At 8.8, the average number of credit agreements per applicant is at its highest since the Debt Index began. This indicates the extent of financial pressure consumers are experiencing,” Sager said.<\/p>\n\n\n\n

The middle-income brackets, particularly those earning between R10,000 and R50,000 a month, have experienced almost no growth in take-home pay.<\/p>\n\n\n\n

At the same time, several essential expenses have increased at a rate significantly faster than inflation. Petrol prices have risen by 46% since 2021, while electricity tariffs have increased by 101%.<\/p>\n\n\n\n

For people taking home between R10,000 and R20,000 a month, groceries account for 38% of their disposable income. Among those earning less than R10,000, this rises to 50%.<\/p>\n\n\n\n

The situation has also been affected by rising borrowing costs. Following interest rate cuts in 2024 and 2025, the South African Reserve Bank’s repo rate has since risen to 7.25%.<\/p>\n\n\n\n

DebtBusters said the average annual interest rate on unsecured debt among incoming applicants has reached 19.85%, compared with 14.1% for vehicle finance and 10.6% for home loans.<\/p>\n\n\n\n

Financial pressure is also becoming more widespread across age groups. Under-25s now account for 9% of new debt counselling applicants, three times their proportion in 2024. People aged 45 and older account for 29%, compared with 22% in 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"

People taking home more than R35,000 and R50,000 a month are spending almost all their income on debt repayments.<\/p>\n","protected":false},"author":92,"featured_media":864078,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"failed","_sma_x_autopost_error":"Instagram publishing failed: Instagram returned HTTP 400: Media ID is not available","_sma_x_post_id":"2120095381790879880","_sma_facebook_post_id":"191437357620492_2268046354015763","_sma_instagram_post_id":"","_sma_x_attempts":1,"footnotes":""},"categories":[11121],"tags":[13165,853],"class_list":["post-883547","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-debtbusters","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/883547","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=883547"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/883547\/revisions"}],"predecessor-version":[{"id":883574,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/883547\/revisions\/883574"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/864078"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=883547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=883547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=883547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}