South Africans struggling with debt are spending a significant portion of their income on unsecured debt repayments. According to new data from the South African Financial Pressure Index, the median share of net income going towards unsecured debt repayments among 1,577 debt review applicants was 57.8%. This is a concerning trend, especially when considering that this figure does not include home loans or vehicle finance.
The data also reveals that earning a higher income does not necessarily provide protection from financial trouble. One in five debt review applicants earned more than R15,000 a month, while one in eight earned more than R20,000. However, median unsecured debt also rose sharply with income. Applicants earning between R5,000 and R10,000 a month had median unsecured debt of R10,295, compared with R121,134 among those earning between R20,000 and R30,000.
The findings of the South African Financial Pressure Index are consistent with broader research showing that many South Africans have little room to absorb an unexpected financial shock. A recent survey by FinMark Trust found that 48% of adults, equivalent to about 22.4 million people, were not saving at all. Formal saving fell to 22% in 2025 from 30% a year earlier. This lack of savings makes it difficult for individuals to cope with unexpected expenses.
Experts are warning consumers to be cautious about their spending habits and to prioritize saving. Ben Webbstock, founder of Fynbos Money, says consumers need to distinguish between consistently spending more than they earn and an unexpected expense temporarily pushing costs above income. He recommends examining where money is going, distinguishing between needs and wants, and identifying expenses that can be reduced or removed.
Building an emergency fund is also crucial, according to Leonie van Pletzen, CEO of the Credit Association of South Africa. A dedicated liquid reserve can reduce the need to turn to short-term loans, credit cards, or registered micro-lenders when unexpected expenses arise. Van Pletzen describes debt review under the National Credit Act as a legal safety net once someone becomes over-indebted, but says preventative measures are preferable.
National Debt Counsellors director René Moonsamy advises consumers to prioritize paying off high-interest unsecured debt and direct extra money towards settling debt rather than taking on additional credit. He also recommends avoiding using credit for everyday expenses, maintaining emergency savings for unexpected costs, and regularly reviewing outstanding balances and repayments.
The importance of saving and budgeting cannot be overstated. Siyabulela Nomoyi, a quantitative portfolio manager at Satrix, notes that helping family members should be included in financial planning. Sino Booi, product development lead at Momentum Savings, illustrates the cost of borrowing rather than saving with the example of a R100,000 holiday five years from now, which can cost nearly R40,000 less if saved rather than borrowed.
Key points
- South Africans applying for debt review spend almost 60% of their take-home pay on unsecured debt repayments.
- Many South Africans have little room to absorb an unexpected financial shock, with 48% of adults not saving at all.
- Experts recommend prioritizing saving, building an emergency fund, and paying off high-interest debt to avoid financial trouble.
