A stark new survey conducted by Debt Rescue paints a dire picture of household finances in South Africa, with the vast majority of families under such extreme pressure that many are cancelling or drastically scaling back their end-of-year holiday celebrations.
The survey, designed to gauge consumer financial health during the traditionally high-spending festive season, found that 71% of respondents are merely “just coping,” while a further 32% report being under “severe financial pressure.”
Debt Rescue’s chief legal officer, Annaline van der Poel, who led the research, called the findings “very concerning.” She stated that the numbers indicate the majority of South African consumers are “literally on the brink,” struggling with debt repayments and a relentless cost-of-living crisis.
Methodology and Key Indicators
Van der Poel explained that the survey was disseminated via social media to capture the experiences of ordinary South Africans. It focused on specific behavioural indicators, including whether households had cancelled travel plans, altered budgets, reduced gift-giving, or exhausted their available funds for the season.
Cost of Living Outpaces Interest Rate Relief
When asked to identify the primary causes of the strain, respondents overwhelmingly pointed to the soaring cost of living, compounded by existing debt. Van der Poel noted that while there have been interest rate cuts in 2025, their benefit has been “completely wiped out” by rising prices, particularly for food.
“Food inflation is significantly higher than the headline rate,” she said, emphasising that this essential expense carries disproportionate weight in household budgets, leaving families with less for other necessities.
Resilience Meets Reality
While acknowledging the resilience of South African consumers—who are notably cost-conscious and actively try to budget—Van der Poel warned that this resilience has limits. “We can only be resilient to a point when it comes to ultimately putting food on the table, making sure that our families are fed and still trying to pay the bills,” she said.
Warnings on Credit and Calls for Policy Action
The survey also touched on concerning financial behaviours, including the use of “buy now, pay later” schemes and credit for consumables. Van der Poel cautioned that needing credit for daily essentials is a clear sign of potential over-indebtedness and may signal a need for professional debt counselling.
From a policy perspective, Van der Poel suggested that further zero-VAT ratings on essential food items in the upcoming budget could provide some relief. However, she stressed that meaningful interest rate reductions are critically needed, as previous small cuts have been ineffective against rampant inflation.
She also highlighted deeper structural issues, such as South Africa’s reliance on road transport for goods. “Every time we have a fuel price fluctuation… we’re paying for it indirectly,” she said, advocating for long-term investments in rail infrastructure to reduce transport costs.
The survey results present a sombre outlook for the festive period, indicating that for a significant portion of the population, financial survival is taking precedence over seasonal celebration.