South Africans remarkably resilient despite economic challenges

South Africans are showing remarkable financial resilience and adaptability driven by increased confidence in their ability to save and invest, despite the economic challenges they face. However, while men are less financially stressed, women are not so lucky.

According to the latest Old Mutual Savings & Investment Monitor 2024 survey, financial stress among working South Africans has decreased significantly, with 37% financially stressed compared to 58% in 2020. In addition, 68% are optimistic that their financial situation will improve in the next six months, up from 53% in 2020.

The Old Mutual Savings & Investment Monitor is an annual survey that tracks the shifts in the attitudes and behaviours of working South Africans.

The survey also reveals a promising trend in access to financial advice, with 43% using a financial adviser in 2024, up from 39% in 2023, while 86% consulted their adviser in the past year.

“These key findings suggest increased access to financial advice is responsible for driving financial confidence. This optimism is crucial for promoting proactive financial behaviour and continued resilience,” says Vuyokazi Mabude, head of knowledge and insights at Old Mutual.

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South Africans are also resourceful

And South Africans are not just resilient but resourceful. Mabude says this shift in mindset is evident in their proactive approach to managing their finances. “The survey showed that respondents are increasingly finding innovative ways to improve their financial well-being, from engaging in side hustles to participating in the gig economy.”

The survey found that 57% of South Africans now juggle multiple income streams, up from 50% in 2023, showing a significant trend towards financial diversification.

Polyjobbing, the practice of having multiple jobs or income sources, is especially prevalent among young adults, with 73% of people between the ages of 18 and 29 engaged in this practice.

“In addition, 54% of this group earn some income through social media, with about a quarter considering it a significant part of their overall income. This increase in income diversification by young working South Africans highlights economic adaptability and technological savviness,” Mabude says.

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Growing entrepreneurial spirit

The survey also indicated a growing entrepreneurial spirit growing in South Africans increasingly seeking financial security and growth opportunities outside of traditional employment. This year the survey showed that 47% of working South Africans own a business, up from 44% the previous year, while about a third of individuals (32%) are prioritising saving to start or finance a business, up from 27% in 2023.

“The increase in business ownership and savings for entrepreneurial ventures highlights a significant shift towards self-reliance and confidence in the economy, which has improved to 36% from 27% in 2023,” she says.

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However, not such good news for women

However, the survey revealed that it is not all positive for South African women, despite similar patterns of polyjobbing and entrepreneurship to men. Before COVID-19, men and women had almost identical financial satisfaction and stress levels, but the pandemic hit women harder, causing a longer recovery.

By 2020, women who were highly financially stressed surged to 60% and remained above 50% until 2023. Men who were highly stressed shifted down more rapidly from 57% in 2020 to below 50% by 2022.

“Significant improvements occurred over the past year, but challenges remain. By 2024, women who were highly financially stressed decreased to 39%, still reflecting the greater challenges they faced. Meanwhile, men’s stress levels decreased to 34%,” Mabude says.

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Most South Africans do not know enough about two-pot retirement system

A critical aspect of this year’s report is the introduction and awareness of the two-pot retirement system effective from 1 September. The monitor reveals that 43% of South Africans do not fully understand the new reforms.

“While 63% of South Africans are aware of the new laws, understanding remains low with only 24% claiming to comprehend the system very well. Employers are urged to bridge this knowledge gap, as only 22% of employees with a pension or provident fund through work reported receiving comprehensive information and training on the reform,” Mabude warns.

Other interesting findings include:

• Consumers are making positive trade-offs and cutting expenses. For example, 66% used loyalty points/rewards and 32% switched to cheaper TV streaming options.
• 30% of respondents approached creditors to make other payment arrangements, up from 24% in 2023.
• 46% of respondents indicated that a comfortable retirement is their top savings goal. This goal is followed by 43% saving for an emergency or rainy-day fund and 43% are focused on paying off debt.

There is a gradual increase in the uptake of offshore investments, with 29% of respondents having money invested in offshore assets, up from 24% in 2022.