South Africa’s middle-income earners are barely breaking even and, experts say, they’re headed for a tighter money crunch as a perfect storm is stirred up by increased interest rates, rising inflation and steeper fuel prices.
Benay Sager, head of DebtBusters, says a material decline in disposable income and a higher debt burden over the past six years are contributing to the financial challenges many South Africans are facing. The latest DebtBusters Debt Index for the first quarter of 2022 indicates that, in real terms, South Africans now have 31% less disposable income than six years ago. This, with a higher debt burden, is fuelling increased demand for debt counselling.
