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South African consumers hard hit by rising living costs are this year being increasingly forced to prioritise short-term financial needs at the expense of setting money aside for their long-term security, in a country where the savings rate has always been too low to begin with.<\/p>\n
In its latest quarterly bulletin,<\/a> published last week, the South African Reserve Bank said the national saving rate \u2014 gross saving as a percentage of nominal GDP \u2014 ticked up only slightly to 14.9% in the first three months of this year from 13.3% in the fourth quarter of 2025.<\/p>\n This was before the Middle East conflict sent the cost of living and doing business spiralling and the savings rate is likely to weaken in the second quarter, analysts said.<\/p>\n \u201cGiven the financial stress that most South Africans are currently under, one can assume that the state of savings has actually deteriorated,\u201d said financial expert Gerald Mwandiambira, the former CEO of the South African Savings Institute (Sasi).<\/p>\n Founded in 2001 as a public-private initiative to promote a savings culture in the country, Sasi has for two decades spearheaded an annual savings campaign during July \u2014 dubbed Savings Month \u2014 but was forced to shut its doors about two years ago due to a lack of funding and sponsors.<\/p>\n \u201cPart of the reason that the Savings Institute lost its impact was because the message to save was received and heard, but that message is predominantly for employees who receive regular income,\u201d Mwandiambira told Business Day, adding that high levels of household indebtedness is also a deterrent.<\/a><\/p>\n According to a recent study by Debt Rescue, nearly half of consumers would experience severe financial pressure and struggle to manage if the Bank were to raise interest rates further after the 25 basis point increase in May.<\/p>\n \u201cThe unfortunate mindset is that most people believe they can only start saving when they have no debt. It shouldn\u2019t be the case. We need to continue to encourage people to save and income can even be your government grant, there\u2019s no such thing as earning too little to save,\u201d Mwandiambira said.<\/p>\n