While it may seem like South Africa’s economy is bouncing back with recent positive reports on inflation and interest rates, the financial reality for many consumers remains challenging.
Despite income growth being better than in previous years, it still fails to keep pace with the rapid rise in everyday expenses, leaving many South Africans struggling to make ends meet.
According to the latest DebtBusters Q4 2024 Debt Index, consumers in South Africa are facing a significant challenge when it comes to debt repayments.
For those earning more than R35,000 per month, the total debt-to-annual net income ratio is a staggering 187%, with 74% of their take-home pay used just to service their debts.
For those earning less than R5,000, the numbers are equally concerning, with 72% of their monthly income being dedicated to debt repayment.
The financial strain is even more evident when comparing the prices of essential goods. Since 2016, electricity tariffs have increased by 135%, petrol prices have surged by 72%, and inflation has compounded by 44%.

These increases have diminished the purchasing power of consumers, with many seeking debt counselling to deal with the growing burden.
The Q4 2024 Debt Index reveals that consumers seeking debt counselling needed, on average, 68% of their take-home pay just to service their debt before reaching out for help.
This is the highest recorded level since 2017, underscoring the financial pressure many are facing.
Despite the increase in income for some consumers, the real impact of inflation is stark. For example, consumers applying for debt counselling in Q4 2024 had 42% less purchasing power than they did in 2016.
Nominal incomes have increased by just 2% over the past eight years, but inflation has far outpaced this, leaving consumers with less disposable income.
DebtBusters has seen an uptick in demand for online debt management tools, with a 9% increase in enquiries for Q4 2024 compared to the previous year.
This shows that more consumers are proactively addressing their debt before it becomes unmanageable.
Additionally, the number of successful debt counselling completions has risen eight-fold since 2016, with over R667 million worth of debt repaid by those who successfully completed the counselling process in Q4 2024, it said.
Benay Sager, executive head of DebtBusters, said the subscriber base for free online debt-management tools reached over a million in 2024.
The Debt Index also found Q4 2024 to be the second consecutive quarter where the median debt-to-annual-income ratio increased from all-time lows.
Currently, this figure is 113%, indicating that consumers are still experiencing the effects of interest rate increases that began in November 2021, and despite some respite, remain elevated.
“Eighty-two per cent of those who applied for debt counselling during the quarter had a personal loan and 52% a one-month loan. This indicates that consumers continue to supplement their income with short-term loans and personal loans have become a lifeline for many people,” said Sager.