The number of people supporting their children as well as their parents is growing, reducing their ability to save for emergencies, a study shows.<\/p>\n
This is one of the research findings of this year\u2019s Old Mutual Savings and Investment Monitor. The full results will be released next week.<\/p>\n
In fact, 25% of all working metropolitan South Africans now fall into this Sandwich Generation category, the highest percentage since the Monitor\u2019s launch in 2009, the researchers said in a statement.<\/p>\n
The financial consequence of having two generations of dependents is starkly revealed by the statistics: this year, 28% of \u201cSandwich Generation\u201d individuals are overdue with debt repayments, compared with 15% for the \u201cNon-Sandwiched\u201d.<\/p>\n
But the Sandwich Generation is not the only group under financial pressure: 41% of all respondents state they are saving less than they were a year ago. In the lower household income category (those earning R6 000 and less per month) this number rises to 51%.<\/p>\n
No financial buffer or emergency fund<\/strong><\/p>\n What\u2019s more, many have no financial buffer or emergency fund.<\/p>\n For example, as many as 52% say they would have to take out a personal loan, rely on credit facilities or borrow from family and friends to be able to manage an unexpected expense of R10,000.<\/p>\n Another 28% say they would not be able to handle a bill like that at all.<\/p>\n There is however a plus side, says Old Mutual research manager Lynette Nicholson.<\/p>\n \u201cThere are signs that there is a growing awareness of the benefits of saving and investing,\u201d she said. \u201cIt is encouraging to note that approximately 60% now contribute towards a pension\/provident fund and\/or Retirement Annuity, compared with around 50% in 2012.<\/p>\n \u201cThe incidence of saving through unit trusts, particularly among higher earners, has also risen steadily: from 10% in 2009 to 22% in 2015,\u201d she said.<\/p>\n Growth in stokvels is remarkable<\/strong><\/p>\n The growth in the number of working metropolitan households saving in stokvels is even more remarkable, she adds.<\/p>\n \u201cIt\u2019s increased from 45% in 2014 to 58% in 2015 \u2013 and is most pronounced in the R14 000 \u2013 R19 999 and R40 000+ household income categories.<\/p>\n \u201cBut stokvel savings are generally not designed for growth, and what these findings of the Savings and Investment Monitor highlight once again is the urgent need for greater financial knowledge and understanding in South Africa,\u201d said Nicholson.<\/p>\n \u201cThis can best be achieved through expert advice and education on financial planning, debt reduction and wealth creation.\u201d<\/p>\n Fin24<\/a><\/p>\n How much debt do you have?<\/a><\/strong><\/p>\n How much money the average South African is worth<\/a><\/span><\/strong><\/p>\nMore on finances in SA<\/h3>\n