South Africans are experiencing increasing financial stress, particularly among older age groups, as stagnant incomes and rising costs drive a growing reliance on personal loans and debt counselling.

According to DebtBusters’ Q1 2025 Debt Index, the average age of new debt counselling applicants has risen to 41—a notable shift that reflects broader financial strain.

The proportion of applicants aged 45 and older has surged from 19% in 2016 to 33% in 2024, highlighting how economic pressures are increasingly affecting older working-age individuals.

This shift not only reflects rising financial pressure but also leaves individuals with far less time to recover financially or adequately plan for retirement.

And trend is compounded by a 53% decline in purchasing power since 2016, due to inflation consistently outpacing wage growth. Despite nominal salary increases over the years, real income has stagnated or declined.

As of 2025, average nominal incomes for new debt counselling applicants are now 1% lower than in 2016, while cumulative inflation has reached 52%. Consumers have struggled to keep up with rising expenses—electricity tariffs are up 135%, and petrol prices have climbed by 88% over the past nine years.

In response, a growing number of South Africans are turning to unsecured credit to bridge the gap. 91% of consumers applying for debt counselling in Q1 2025 had at least one personal loan, and 37% had taken out short-term, one-month payday loans.

This marks a record-high dependence on personal credit as a stopgap for essential expenses.

It’s clear that while consumers may feel a little more positive, personal loans, especially one-month loans, remain a lifeline for many because income has not kept pace with rising expenses, said Benay Sager, executive head of DebtBusters.

Debt repayments now consume an average of 69% of take-home pay for those seeking counselling – the highest level since 2017.

The debt burden cuts across income levels: low-income earners (R5,000 or less per month) spend 76% of their income on debt, while high-income earners (R35,000 or more) allocate 77%.

Complicating matters further is the impact of interest rate changes. Since late 2021, a series of rate hikes pushed the repo rate to a peak in Q4 2023. Although it stabilized and slightly decreased in Q4 2024, new applicants continue to face elevated borrowing costs.

This has affected the structure of consumer debt: the share of home loan debt among new applicants has grown since 2022, now making up 27% of their total debt, reflecting both changing borrowing patterns and the long-term impact of rate fluctuations.

Amid these challenges, there’s cautious optimism from recent reforms such as the rollout of the ‘two-pot’ retirement system, which may provide limited liquidity relief. Yet the broader picture remains troubling: South Africans are under unprecedented financial pressure, and older adults are increasingly at the centre of this crisis.