QUICK READ COST OF LIVING

SOUTH Africans spend more than a third of their income on food, and rising costs have a significant impact on their finances.

This is according to the FinScope Consumer South Africa 2023 survey.

Living expenses, such as groceries, energy, transport and communication, use up approximately 85% of monthly income. Groceries account for 30.4% of expenses, followed by energy (11.5%), transport (9.1%), communication (8.8%), and basic household maintenance and rental rates (8.5%).

According to the report, rising expenses limit access to education and hinder debt repayment. The March 2023 Credit Bureau Monitor report by the National Credit Regulator showed that 23% of clients missed instalment payments, underlining their financial vulnerability.

“It is considered highly burdensome to allocate more than 10% of income to household energy expenses, including electricity.

Jabulani Khumalo, senior data and analytics specialist at FinMark Trust, said consumers were unlikely to get relief this year “as they have recently endured a staggering 12.74% increase in Eskom’s tariffs, with no indication of interest rates decreasing any time soon”.

Khumalo said two out of five people reported having no electricity at home last year because of financial constraints.

He said 30 million of the country’s economically active adults, or 86%, lacked retirement plans, according to FinScope data. Two out of three of South Africans earning between R9 999 and R20 000 did not have retirement financial products.

The cost of living meant that priorities had shifted from saving for the future to fulfilling immediate financial needs. |