South African consumers are struggling with tough economic conditions, as new data from Standard Bank reveals that saving even one month’s salary is becoming increasingly difficult.
Over half (52%) of the bank's entry-level private banking clients have less than a month's salary saved.
Standard Bank’s analysis compared the value of accessible cash savings (available within 24 hours) to monthly salaries and fixed expenses among its Prestige and entry-level Private Banking clients.
Among Prestige clients, who earn between R25,000 and R58,000 a month, nearly one in three (29%) had no accessible emergency savings.
In the higher income bracket, individuals earning between R700,000 and R1 million annually, over a third had no emergency savings at all, and 45% had savings that would last less than a month.
The data highlights that when it comes to unforeseen circumstances such as retrenchments or urgent medical procedures, most of these clients lack the funds to address these issues.
Without savings, many have resorted to debt, eroding their ability to build wealth over the long term, the bank noted.
Doret Jooste, Head of Money Management and Advisory at Standard Bank, stressed that the ability to build adequate emergency cash savings is not solely dependent on earning a higher income.
“Having cash savings on hand is the cornerstone of healthy money management and likely the most important thing to prioritise when you want to start building your wealth,” Jooste said.
Bridgette Kruger, Standard Bank’s Head of Private Banking in SA, advised that South Africans should aim to have at least three months' worth of salary saved.
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