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According to recent reports, South Africa’s savings rate is alarmingly low, with Deloitte’s South African Investment Management Outlook for 2023 revealing that it sits at just 0.5%.
In addition, a study by Genesis Analytics and the Financial Sector Conduct Authority (FSCA) found that 90% of South African retirees struggle to maintain their pre-retirement standard of living.
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It was for this reason Nedbank conducted a rather interesting social experiment.
The bank took over a restaurant in Sandton, the wealthiest square mile in Africa, and replaced their usual young waitstaff with older actors who were at retirement age.
The actors carried out their duties as waitrons, as unsuspecting patrons placed their orders and expressed their frustrations when their service expectations were not met.
The patrons only realized they were part of a social experiment when they received the bill, which revealed that the person serving them was not really a waitron but an actor there to demonstrate what working life would be life past retirement age for the 90% of South Africans who cannot afford to retire.
Nedbank called it the ultimate reality check and a major wake-up call.
Buli Ndlovu, Executive Head of RBB Marketing at Nedbank, explained that while South Africans are taught to respect their elders, the patrons at the restaurant found it difficult to hide their frustration in that environment. “The moment of realisation came when the bill arrived, leaving a lasting impression on the diners,” she said.
And it’s not looking up for South Africans anytime soon.
According to BankservAfrica, a company that handles financial transactions, salaries in South Africa have been growing steadily over the past five years. On average, people have been earning more money. For example, in February 2018, the average monthly pay was R12,573, but by February 2023, it had increased to R15,438.
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However, it’s important to consider the cost of living, which measures how much things cost in South Africa. The Consumer Price Index (CPI), which tracks these costs, showed that prices went up by 26.6% during the same time period. This means that the increase in salaries did not keep up with the rising prices of goods and services.
As such, South Africans are forgoing saving for the future and are instead focussing on the present.
But Nedbank is warning people against this practice, stressing that with the life expectancy of the average person increasing steadily, it was important to plan for the future.
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