According to TransUnion's Consumer Pulse Study (CPS) for the second quarter of 2026, South African consumers are grappling with rising inflation and declining financial optimism. Furthermore, 79% of respondents cited inflation as a major problem, forcing households to change their spending and borrowing habits to cope with financial pressure.
Households in South Africa are experiencing significant financial strain as the cost of living continues to outpace income growth. The CPS study revealed that nearly four out of ten South Africans (39%) expect to miss at least one bill or loan payment in the coming months, highlighting the persistent impact of inflation on family finances.
The results indicate that despite adapting to difficult economic conditions, there is no widespread recovery. Instead, households are forced to make increasingly complex decisions as the pressure on purchasing power changes their approaches to spending, borrowing, and saving.
Ayesha Hatea, Director of Research and Consulting at TransUnion South Africa, notes that 'Consumers are still coping, but the margin for error is shrinking. Even a moderate increase in the cost of necessities forces difficult decisions, which is reflected in reduced confidence and more cautious credit behavior.'
Although the financial situation of households remains relatively stable compared to the previous year, confidence in the future continues to decline. The survey found that 43% of respondents feel their financial situation is better than expected, slightly lower than the 44% recorded in the second quarter of 2025. However, four out of ten consumers (40%) stated that their financial situation is worse than planned, indicating ongoing pressure on many families.
Financial optimism is also weakening: two-thirds (66%) of respondents are optimistic about their financial future, down from 71% the previous year, while the share of pessimists rose from 15% to 19%.
Income expectations are also falling. Seven out of ten South Africans forecast household income growth over the next 12 months, compared to 75% the previous year. However, the gap between earnings and the cost of living remains a serious issue: only 37% of respondents believe their income keeps pace with inflation, while 41% disagree.
It is unsurprising that rising prices for essential goods such as food and fuel rank among the top three problems for 79% of respondents. According to Hatea, inflation remains the biggest challenge for households. She emphasizes that 'even where incomes are growing, basic expenses quickly absorb that support. This makes budgeting discipline and financial literacy more important, as households need to know where they can adjust spending when pressure increases.'
Faced with increasing financial pressure, South Africans are tightening their household budgets and reducing spending on luxuries. More than half of respondents (53%) reported cutting non-essential expenditures in the last three months, including dining out, entertainment, and travel. Additionally, 28% canceled subscriptions or memberships, and 24% reduced or stopped spending on digital services such as internet, streaming platforms, and pay television.
The study also revealed various approaches to debt and savings. Nearly a third (32%) is accelerating debt repayment, and 27% are increasing contributions to reserve savings or stockpiles. One in five respondents reported increasing retirement savings. Nevertheless, not all households can strengthen their finances: fourteen percent are cutting pension savings, another 14% rely more on accessible credit, and 13% are using retirement savings to cover expenses.
In the future, consumers anticipate further increases in the cost of necessities. About 37% predict an increase in utility bills and loan repayments over the next three months, and a third expects higher medical expenses. While 36% intend to increase contributions to retirement savings or investments, 16% plan to reduce them.
Hatea concludes that 'These findings show how carefully households are trying to manage trade-offs. Some consumers are still building buffers and paying down debt, while others are using savings or credit to get through the month. Therefore, the overall picture is one of sustained financial adjustment, not simple improvement.'
Despite the financial pressure, access to credit remains an important part of financial planning. The vast majority of respondents (92%) believe that access to credit products is vital for achieving financial goals, which has not changed compared to last year. Perceived consumer access to credit is improving: 45% feel they have sufficient access to credit, up from 38% the previous year. Half of the respondents also believe they will be approved for a loan application.
However, improved confidence is not leading to increased demand. Only 36% of consumers plan to apply for new credit or refinance existing debt within the next year, remaining roughly unchanged from 2025. Among those considering taking out a loan but declining, 30% cite the cost of borrowing as the main reason. Credit history is a barrier for 23%, and concerns about income or employment for 22%.
The study also points to the growing adoption of digital financial services. Among digital banking users, 46% bank with purely digital institutions, and 56% used 'buy now, pay later' services. Nearly a quarter (23%) also uses digital or fintech providers.
Nevertheless, the rise in digital participation is accompanied by growing concerns about fraud and cybercrime. Over half of respondents (56%) reported being targeted by online, email, phone, or SMS scams in the last three months. The most common type of fraud is voice phishing (vishing), affecting 34% of victims, followed by SMS phishing (smishing) at 33%, and email phishing at 31%.
Furthermore, 26% of respondents reported being informed that their personal information or online account data was exposed due to a data breach in the previous three months. Consumers are taking steps to enhance their online security: more than half (53%) change passwords in response to cybersecurity issues, 37% check their credit reports, and 12% purchase antivirus or internet protection software.
Despite the challenging economic environment, the study shows that South Africans are actively managing their financial well-being. More than a third (34%) monitor their credit reports monthly, 13% do so weekly, and 6% do so daily. More than half of respondents (52%) believe their credit score will improve if lenders consider additional financial information beyond traditional credit reports, including rent payment history, 'buy now, pay later' transactions, and short-term loan repayments.
Overall, the latest Consumer Pulse Study from TransUnion paints a picture of resilience tempered by growing financial constraints. South African households continue to adapt by cutting non-essential spending, managing debt more carefully, and seeking greater control over their finances; however, persistent inflation and the rising cost of living continue to test their ability to withstand further economic shocks.
The debt burden of households in South Africa has significantly increased, reaching a colossal figure of 2.4 trillion rand, forcing citizens to reassess their financial management strategies and pay more attention to savings.
As South African families face the rising cost of living, the debt burden has reached an alarming level of 2.4 trillion rand. According to the latest data from the National Credit Regulator, this serious trend has resulted in 4.9 million consumers having damaged credit records, and another 6.3 million struggling to repay their debts.
Tina Manyanya, a representative of the short-term lender Wonga, advises that despite the seemingly insurmountable debt situation, small and regular changes can lead to significant improvements over time. She emphasizes that improving one's financial standing does not happen instantly but requires gradual and targeted efforts to increase resilience against financial pressure.
To help South Africans achieve financial stability, Manyanya proposed five actionable methods that are easy to integrate into daily life. Firstly, it is necessary to understand where the money is going: she recommends analyzing bank statements, creating a realistic monthly budget, and prioritizing essential expenses over non-essential ones. This approach helps identify unnecessary spending that can be directed towards debt repayment.
Secondly, when interest rates decrease, one should maintain the same monthly payment amount. This ensures that a larger principal amount is repaid, which ultimately leads to a reduction in the total amount of interest paid and a faster closure of loans. Thirdly, to avoid accumulating high-interest credit card debt, it is recommended to pay off the entire balance each month, rather than just the minimum payment, to prevent compound interest from growing.
Fourthly, Manyanya presents the 'snowball method' for managing multiple debts: one must first focus on paying off the smallest debts with high interest rates, such as credit cards and personal loans. After closing them, the funds previously allocated to these payments can be used to tackle larger debts, such as car loans or mortgages. Finally, it is crucial to create and adhere to a realistic monthly budget, as such a plan is not merely a restriction but an active tool for financial management, promoting conscious spending and progress toward financial goals.
Manyanya stresses that the National Savings Month is a timely opportunity for South Africans to review and improve their financial habits. She concludes that any positive step—whether reducing debt, starting a saving habit, or increasing financial literacy—brings a person closer to greater economic security.
In July, which is observed as Savings Month, consumers are strongly advised to strengthen their financial well-being. This is achieved by forming sustainable saving habits, increasing financial literacy, and making informed financial decisions.
Amid rising costs of living and increasing household debt burdens, even modest savings can help families prepare for unforeseen expenses, achieve set financial goals, and reduce stress levels. South Africans face difficulties in regular saving, making them vulnerable to emergencies such as medical expenses, job loss, or unplanned family expenditures.
Dr. Ivan Meyer, a member of the Western Cape Agricultural Economic Development and Tourism Executive Committee, emphasized that financial education is an empowerment tool. He noted that understanding concepts such as budgeting, responsible borrowing, and long-term saving allows people to take control of their finances, increase resilience to financial shocks, and secure a better future for themselves and their families.
Savings Month aims to raise awareness about the importance of building emergency funds, setting achievable financial goals, and incorporating savings into daily financial planning. Meyer urged consumers to take several actions: create and stick to a monthly budget, set realistic saving targets, regularly set aside funds regardless of the amount, build an emergency fund, avoid unnecessary debt and impulse spending, and continuously improve their financial knowledge.
Meyer also stated that financial stability is determined not by a person's income size, but by the effectiveness of managing and protecting their resources. Creating a culture of saving contributes to greater financial stability, independence, and peace of mind. The Consumer Protection Agency plays an important role in this process by promoting financial well-being through education, information campaigns, and guidance on making responsible financial decisions. The Agency helps consumers understand their rights and obligations, avoid fraud and unfair practices, and develop practical money management skills.
As part of Savings Month, Meyer calls on consumers to take at least one practical step to improve their financial situation: review their budget, identify unnecessary expenses, start building an emergency fund, and commit to saving a small amount every month. Consumers are also advised to use free financial education resources and seek information before signing any financial agreements or taking out loans. Meyer concluded that every saving decision, no matter how small, contributes to greater financial security and sustainability.
A new joint study by Liberty and the University of Cape Town (UCT) has shown that South Africans aged between 35 and 55 are experiencing growing anxiety regarding retirement provision, job stability, and the rising cost of living, despite being in a period of earning their highest incomes.
The study demonstrates that for this demographic group, financial stability has become more important than accumulated wealth as a primary measure of success. South Africans in their prime careers feel increasingly financially vulnerable as family maintenance costs, supporting relatives, and retirement preparation confront general economic uncertainty, even with higher salaries.
The report, titled 'The Messy Middle: A focus on mid-careers 35 to 55', is based on interviews with 43 professionals aged 35 to 55 from various industries, as well as secondary research and academic literature. It analyzes the financial realities, aspirations, and concerns of one of South Africa's most economically significant groups.
According to the study, approximately 16 million South Africans fall into the 35–55 age bracket, with about a third belonging to high and affluent income segments. The average annual income for the 35–44 age group is approximately R378,937, while for the 45–54 age group, it reaches R472,327. Despite these higher incomes, many respondents reported feelings of financial exhaustion and emotional burnout, as their earnings coincide with the most demanding period of their lives.
The report states that many people are going through a phase of 'peak responsibility,' balancing a settled career, home ownership, raising children, supporting extended family, and managing growing financial obligations. Paul Egan, Director of the UCT Liberty Institute of Strategic Marketing, noted: 'The study shows that mid-aged South Africans are not failing at planning, but managing risks under constraints. This generation is trying to hold together careers, families, ambitions, and financial commitments in an environment where the margin for error seems to be shrinking.'
Researchers identified a state they termed 'peak vulnerability'—a life stage where financial obligations reach their maximum, and the ability to recover from financial setbacks decreases as retirement approaches. Although many respondents have established careers, the report points to growing financial fragility.
Nearly three-quarters of working South Africans aged 30 to 49 reported sometimes or regularly living beyond their means, and about 86% financially support children. The cost of education consistently featured as one of the biggest financial burdens for households. Many feared job loss, serious illness, or unexpected financial shocks that could erase years of hard progress. Some described their situation as 'one bad year away from financial regression.'
The study also highlights widespread concern over employment stability, career stagnation, and the impact of technological changes. Many respondents noted that the traditional guarantee of employment no longer exists. Artificial intelligence and rapid technological advancements caused additional anxiety, as some feared their skills would become obsolete while feeling too old to change careers or start professional life from scratch. Researchers also pointed to the so-called 'plateau effect,' where many mid-career professionals feel that promotions and salary growth have slowed down, while their financial obligations continue to rise.
The report suggests that traditional markers of financial success are giving way to a stronger emphasis on stability and resilience. Instead of chasing a luxurious lifestyle or accumulating visible wealth, many respondents stated that their priority is protecting their families' quality of life and preventing financial decline.
John Taylor, Head of Liberty Corporate Benefits Consulting, stated: 'What people want more and more is not extravagance, but security. Today's drive is to remain stable, maintain dignity, and avoid regression.'
Many participants also reported a shift in priorities from continuous career growth to a broader understanding of well-being. Physical and mental health are increasingly viewed as integral parts of maintaining financial security, with concerns about personal well-being often outweighing purely financial worries. For many respondents, protecting health has become critical to preserving income, independence, and overall quality of life amid growing uncertainty.
The study also showed that many South Africans are rethinking their views on retirement. Rather than viewing it as a fixed age or the complete end of working life, respondents increasingly perceive it as a gradual transition involving multiple income streams, flexible work, consulting work, side ventures, and phased career changes.
Many participants expressed concern about whether they have saved enough for retirement, especially after career breaks, economic shocks, or delays in financial milestones. However, the report notes that many no longer view interrupted savings paths as a personal failure. Instead, respondents emphasize flexibility, resilience, and the ability to maintain financial stability during uncertain periods, defining retirement more through independence and dignity than through achieving a predetermined savings goal.
Taylor added: 'For many South Africans, the goal is no longer just retiring at a certain age, but creating sufficient stability and opportunities to confidently navigate an uncertain future.'
In conclusion, the report argues that financial institutions will need to revise traditional retirement planning models to better align with the realities faced by modern consumers. Researchers insist that financial products and advice must prioritize flexibility, income resilience, and support across different life stages, rather than focusing solely on fixed retirement outcomes.
Taylor believes: 'The role of financial institutions is changing. Consumers increasingly expect financial institutions to act as guides and protectors, helping to reduce fragility, build resilience, and support people through changing life stages, rather than just promoting idealized financial outcomes.'
The report concludes that this will require products, financial advice, and communication strategies that acknowledge changing financial circumstances, support major life transitions, and focus on long-term sustainability rather than perfection.
