With the holiday season imminent, concerns are mounting about the financial well-being of South Africa's middle class, which has endured a difficult year characterised by water shortages, elections, and escalating living expenses.
According to research by BrandMapp, the country’s formally employed income earners are not feeling pessimistic about their finances.
Their research measured what’s going on in the lives of the 13 million South African adults living in taxpayer households.
When it comes to debt levels, consumers over the past four years have shown that they are less worried about their debt burden.
According to BrandMapp’s Director of Storytelling, Brandon De Kock, the percentage of people saying they have no debts at all or are not at all worried, has shrunk from 60% to 51% in the past four years, with the biggest jump coming in 2023.
“When you look at the BrandMapp audience, fewer than 30% are actually ‘debt-stressed’, and that number drops to just 13% for households earning R1 million or more a year,” he explained.
“More importantly, a massive 51% of all consumer-class adults are either debt-free or not at all concerned about their debt.”
The research found that Gen Z and Boomers stand out as the least debt-stressed, with about 45% having no debt at all, while 35-55-year-olds bear the brunt of debt stress, with 35% in this cohort feeling burdened by its weight.
“The reality is that more highly educated, employed adults know how to deal with debt and use it as a tool to achieve their preferred lifestyle rather than a necessity. Yes, there are certainly new-to-category consumers borrowing themselves into a lifestyle, but the data indicates that it’s a minority, not the majority,” De Kock said.
So, what keeps SA’s mid-to-top earners awake at night?
Financial concerns loom large, but they are not the sole worry for South Africa’s middle class, according to the research.
The data found that 47% of adults say that the thought of ‘rising food and energy costs’ keeps them awake at night.
“Other significant stressors include weak economic growth for 40% of the audience. But they are still more concerned with crime and corruption than either of those,” De Kock explained.
“But despite all these challenges, resilience shines through and almost 60% say they are the same, or better off than they were two years ago, with only 15% saying they are ‘much worse off,” he added.
A bright light
The data also noted that there is more encouraging news, as South Africa’s high-income earners are growing at twice the rate of inflation, while the millionaire class (those earning R1 million or more annually) is expanding at a rate of 20% or more.
“This isn’t just about the rich getting richer,” De Kock noted.
“There’s a rapidly growing economic elite forming at the top of the country’s income pyramid. It means that the tax burden on the super-wealthy is actually getting better, not worse, and it also means that if we can turn things around on a macroeconomic level, there’s a highly skilled, educated, and motivated group ready to pull the country into a brighter future,” he concluded.
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