South Africans plan to cut spending across a number of areas after the COVID-19 pandemic has run its course, according to the 2020 Old Mutual Savings and Investment Monitor report.
The report surveyed South Africans with a minimum personal income of R5,000 per month, asking them about their projected spending and saving trends following the advent of the COVID-19 pandemic.
Its findings portrayed a significant spike in financial anxiety among South Africans, with financial satisfaction levels hitting an all-time low.
“Not only are absolute income levels under pressure as many take salary cuts, but demands on share of wallet are increasing as never before,” the report said.
“A third of consumers find that they are having to support more people financially than they did before the pandemic.”
“Couple that with a constant fear of retrenchment or loss of income, and no wonder stress levels have skyrocketed,” it added.
Savings have been further eroded, and South Africans are doing their best to adapt to the financial pressure through online stokvels, relief measures, loyalty rewards, and interpersonal loans.
Cutting spending across the board
The researchers asked South Africans how they expect their spending across a variety of areas to change after the lockdown restrictions are ended.
In response, South Africans said they planned to cut expenses to various degrees across the board, with the exception of medical aid and, to a lesser extent, accommodation.
68% of South Africans said they would cut back on their entertainment expenses, including eating at restaurants.
62% said they would spend less on entertaining at home, and 60% said they would cut back on holiday and travel costs following the pandemic.
Other major planned spending cuts included alcohol (56%), cigarettes (48%), and the employment of domestic workers (40%).
MultiChoice’s DStv satellite broadcasting service was also included among the areas where customers planned to save money, with 25% of DStv subscribers planning to cut back on their subscription after the lockdown.
“It is notable that younger consumers are more reluctant to spend less on entertainment, take-aways, eating out and travel, whilst 50+ year-olds are less likely to cut armed response, insurance, assistance to children and medical aid,” the report stated.
Below are the re-based results, which look at the results for each category where respondents were already spending every month.
|Category||Will cut back||Will spend more||Unchanged|
|Eating Out/Entertainment Expenses||68%||9%||23%|
|Having Friends Round/Entertaining at Home||62%||12%||26%|
|Holiday and Travel||60%||12%||28%|
|Shoes and Clothing||48%||11%||41%|
|Online Shopping for Shoes and Clothing||42%||21%||37%|
|Nanny/childminder at home||42%||14%||44%|
|Online Shopping for Electronics and Appliances||41%||21%||39%|
|Pre-School/after care expenses||35%||15%||49%|
|Online Shopping for Groceries||32%||31%||38%|
|Other Online TV/Movie||30%||15%||55%|
|Cell phone/Airtime/Data costs||30%||26%||44%|
|Transport/Getting to Work||28%||20%||52%|
|Assistance/Payments to Children/Dependents||26%||20%||54%|
|Food and Groceries||25%||34%||41%|
|Car and/or Household Insurance||20%||8%||73%|