More education is needed to promote a savings culture in SA

With South Africa’s recent rating downgrade, consumers are experiencing increased financial pressure, making it tough to save, Fourways Review reports.

The South African Savings Institute (Sasi) launched their annual savings month campaign themed around alternative saving solutions this July.

At a VIP and media breakfast, National Treasury representative Olano Makhubela discussed alternative savings during the economic decline.

“Everyone knows that saving is important, but we fail to do it. In our financial climate of instability, households are spending now without thinking about tomorrow. They need to be made aware of alternate savings that yield high returns and spread risk across platforms,” said Makhubela.

Sasi chairperson Prem Govender said: “Savings Month is designed to remind customers to strive towards financial freedom, or remain continuously vulnerable.” She mentioned the need for households to create a financial buffer in the form of a savings nest egg to counter difficult times.

READ MORE:Consumer debt to municipalities still at R117bn

National Treasury representative Olano Makhubela talks about the importance of making South Africans aware of alternative savings solutions. Picture: Sarah Koning

Acting CEO of Sasi, Gerald Mwandiambira said: “South Africans generally don’t have a savings pool to tap into in times of emergency and tend to cash in their retirement savings when times are tough. For this reason, National Treasury introduced vehicles such as the Tax-Free Savings Account in 2015 to encourage household savings. Sasi welcomes this strategy, and is encouraged to pursue this mandate even more aggressively. Hence a key focus of this year’s savings campaign will be to promote savings literacy.”

Group Head of Citizenship at Barclays Africa, Sazini Mojapelo, mentioned saving and investing needed to be taught from a young age and was not done enough in South Africa, emphasising the fact that the financial services industry had a duty to encourage saving.

South African Savings Institute chairperson Prem Govender emphasises the importance of households creating a financial buffer to prevent debt in tough times.

During a panel discussion of experts in the industry, CEO of the Financial Planning Institute of Southern Africa, Godfrey Nti said: “The issue of financial literacy requires more than just sporadic efforts. People need financial education  in the form of coaching and hand-holding.”

Owen Nkomo, CEO of Inkunzi Wealth Group, brought up the fact that many South Africans could afford to save when surviving on the minimum wage with multiple dependents.

Lyndwill Clarke, head of consumer education at the Financial Services Board said corporates should be forced into coordinated financial education which was not seen as a means of marketing, but to bring about change.

Lyndwill Clarke, head of consumer education on the Financial Services Board, discusses his views on alternative savings solutions. Beside him is Vusi Ndwandwe of Absa.

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https://www.citizen.co.za/news/news-national/consumer-debt-municipalities-still-r117bn/

– Caxton News Service

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