Financial services group 10X Investments has published a new report underlining the current financial state of the average consumer in South Africa, and their saving habits – or indeed their ability to save at all.
The 10X Retirement Reality Report (RRR19) – the findings of a survey of more than 15-million economically active South Africans – shows that 67% of people have no retirement plan at all or just a vague one.
10X Investments pointed to a profound lack of understanding among existing clients of the retirement savings industry, regarding what they have actually saved, and what they will need to have saved to preserve their lifestyle in retirement.
The poll found that 72% of those who do have some sort of a plan are concerned that they will not have enough money saved to live on after they retire, while 8 out of 10 respondents who do have some sort of a plan accept that they will need to continue earning an income after they retire
Compared to RRR18, the number of women who felt they were doing badly financially increased from 9% to 16%, with a total of 75% of female respondents believing they were doing badly or feeling unsure about their financial predicament.
The RRR19 confirms anecdotal evidence that times are getting tougher for South Africans of both genders, with a lower proportion of individuals thinking of themselves as doing either well or very well financially, 10X said. For men, this figure has decreased from 40% to 29%; for women, it is down from 37% to 26%.
Given South Africa’s history, it is not surprising that stark differences in people’s financial situation continue to present along racial lines, as evidenced in the graph below. RRR18 showed pronounced differences in general in how different racial groups were preparing for retirement.
As expected, RRR19 found that racially-based differences continue to endure along similar lines. These differences are often described as cultural but frequently they are circumstantial, said 10X.
Of respondents who said they were not saving for retirement, the majority (55%) said they simply could not afford to save money towards retirement, and 36% said retirement saving was not a priority for them at this stage, 10X said.
“As might be expected, younger people are more likely to say retirement saving is not a priority – 80% of people under 35 in this group said retirement saving was not a priority at this stage.”
Founder and CEO of 10X Investments, Steven Nathan, said: “South Africa’s retirement time bomb is ticking ever louder. We all need to urgently confront this reality, to prevent an even greater proportion of South Africans slipping into poverty at retirement.”
Hilan Berger, head of institutional business development at 10X Investments, said: “South African households remain under tremendous pressure financially, which has a negative impact on retirement savings behaviour.”