South African consumers remain optimistic about their personal finances, despite ongoing concerns about inflation and economic volatility.
According to TransUnion’s Q2 2024 Consumer Pulse Study, 72% of consumers expect their incomes to rise in the next year, only slightly down from 76% in Q1 2024.
This optimism persists even as 77% of consumers cite inflation for everyday goods as their top financial concern.
Key Findings:
Income Expectations: 72% of consumers expect their incomes to increase within the next 12 months.
Debt and Savings: 30% are committed to paying down debt faster, while 26% have increased their contributions to emergency funds or stokvels.
Despite a reduction in inflation to 5.2% in April 2024, it remains above the South African Reserve Bank’s midpoint range of 4.5%, with many economists predicting it will stay elevated. Interest rates and job security are also significant concerns for 55% and 52% of consumers, respectively.
As many as 71% of consumers are optimistic about their household finances over the next year, with 63% confident in their ability to meet debt obligations.
However, 37% anticipate difficulties in servicing their current debt, particularly among Gen X and Millennials.
In response to financial uncertainty:
30% of consumers prioritised faster debt repayment.
26% increased savings in emergency funds or stokvels.
20% saved more for retirement.
Impact on Discretionary Spending
38% plan to allocate more funds to bills and loans over the next three months.
Consumers intend to cut back on non-essential spending:
Travel and dining out (net 22% planned to reduce spending).
In-store or online shopping (net 5%).
Large purchases like appliances or cars (net 7%).
Credit and Financial Inclusion
Access to credit is critical for financial inclusion, with 91% acknowledging its importance. However, only 38% feel they have sufficient access to credit, with Millennials leading at 47%.
Among Gen Z, 41% plan to apply for new credit or refinance existing credit, but only 32% believe they have sufficient access. Popular credit products among Gen Z include personal loans (35%), credit cards (26%), and student loans (25%).
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