SA’s top three savings priorities

Insights agency, Columinate, recently surveyed a representative sample of 1 000 urban South Africans to gauge their savings habits, including their preferred savings vehicles, and the results inspire optimism.

Top three reasons for saving

44% of respondents noted that they’re saving for their children’s education, 43% save for emergencies, and 42% are saving for their retirement. Sadly, only 1 in 4 respondents (25%) say that they are currently contributing to a healthcare scheme.

The data indicates that South Africans have lofty aspirations, as 34% of respondents are currently saving for a home, 32% are saving to start their own business, and 31% are saving for their next holiday.

8% of urban South Africans report that they are currently not saving at all.

SA is apprehensive about investment vehicles

68% of respondents are using the traditional bank savings account to do all their household saving – from using the account for retirement planning, emergency planning, or saving for a luxury/necessity, like a holiday or an appliance. Only 29% make use of a tax-free savings accounts, and 28% participate in their community Stokvel.

28% of respondents say that they currently have a retirement annuity, and 22% are reporting that they are members of a provident fund. Only 12% state that they own shares, with 9% investing in unit trusts, and a meagre 5% currently contributing to an endowment policy.

Not quite there yet

Many of the study’s participants are concerned about retiring, as 1 in 4 (24%) respondents report that they will not be able to maintain their current lifestyle once they retire, and 32% simply don’t know if it’s a realistic expectation. Almost 1 in 3 (30%) don’t know if they’ll be able to retire at their desired age. The concern is compounded by the 51% of respondents who reported that they haven’t started saving for their retirement.

The data indicates that South Africans are starting to realise the importance of short- to long-term financial planning, and are making an active effort to secure their financial futures. The data also suggests that there is an opportunity for investment houses to create simpler savings vehicles, or at the very least, be more clear and concise about the opportunities and benefits of existing solutions – many South Africans are strapped for cash and can’t “afford” to save more. Moreover, the financial industry’s complex approach to explaining their savings and investment products can be confusing to many South Africans, and as such, these products are actively avoided.



Latest


21 Sep 2020
Women are lagging in retirement savings and are debilitated by stress

In a recent study of their client base, Momentum Corporate revealed that almost half (41%) of the employees on the…

Women are lagging in retirement savings and are debilitated by stress

In a recent study of their client base, Momentum Corporate revealed that almost half (41%) of the employees on the FundsAtWork Umbrella Funds are women. With an almost 50/50 gender split across the client base, a one-size-fits-all approach to advice on employee benefits simply won’t cut it. This is according…

15 Sep 2020
Despite COVID-19, SA investors expect higher future returns

Even as COVID-19 halted the longest economic expansion on record and plunged the world into deep recession, South African investors…

Despite COVID-19, SA investors expect higher future returns

Even as COVID-19 halted the longest economic expansion on record and plunged the world into deep recession, South African investors expect to make an average annual total return of 12.67% – almost 2% higher than the global average predicted returns of 10.9%. This was revealed in the recently released Schroders’…

15 Sep 2020
Are cryptocurrencies here to stay?

The recent news that cryptocurrency giant, Digital Currency Group, has acquired cryptocurrency exchange company, Luno, has once again highlighted the…

Are cryptocurrencies here to stay?

The recent news that cryptocurrency giant, Digital Currency Group, has acquired cryptocurrency exchange company, Luno, has once again highlighted the rise of cryptocurrencies as a possible alternative to the current global financial system. According to Old Mutual Investment Group Director of Investments, Hywel George, Bitcoin, as well as a number…

10 Sep 2020
How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key…

How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key that dubbed America “The land of the free”, which stuck, to the unforgettable Mel Gibson monologue where an army of painted Scots were willing to trade their lives for the…


Top stories


10 Apr 2020
When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved…

When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved to be most enterprising in acclimatising to challenges as they arise.

13 Apr 2020
Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19…

Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19 environment and what form a global market recovery will take.

13 Apr 2020
SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The…

SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The draft Bill, together with its explanatory memorandum, provides clarity with regards the tax relief measures President Cyril Ramaphosa announced on 23 March.

11 Apr 2020
Finding investment opportunities among the many COVID-19 risks

With many countries around the world in lockdown as they try to contain the spread of the COVID-19 virus, the…

Finding investment opportunities among the many COVID-19 risks

With many countries around the world in lockdown as they try to contain the spread of the COVID-19 virus, the global economy is facing an unprecedented situation of balancing health against financial livelihoods.


Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za