South African households face rising debt as expenses outpace income

South African households are facing increasing financial pressure as rising expenses outpace income growth. An Old Mutual survey of 35,000 clients indicates that many individuals are utilizing withdrawals from the two-pot retirement system to cover essential costs, including food, electricity, rent, and school fees.

Data from the South African Reserve Bank shows that household debt rose to 62.2% of disposable income in the first quarter of 2026, up from 61.8% in the previous quarter. Additionally, a DebtBusters survey of 18,000 consumers revealed that 53% of respondents are spending more than 40% of their take-home pay on debt repayments, a significant increase from 48% the previous year.

René Moonsamy, chairperson of the National Debt Counselling Association (NDCA), stated that the primary issue is income growth failing to keep pace with expense growth, rather than lifestyle overspending. This trend has led many to rely on credit or retirement savings to manage daily living costs.