Financial pressure is being felt among the population of South Africa, affecting people from various income groups. According to the financial stress index compiled by Compare the Market, South Africa ranked ninth out of 32 countries.
A separate local study showed that people seeking debt relief assistance spent more than half of their net income on debt repayment. The median debt repayment burden among applicants at Debt Solutions 4U was R58.40 out of every R100 of net income, excluding rent, transport, food, and other living expenses.
This figure complements an international study that included South Africa in the top ten most financially strained countries out of 32 comparable nations.
Comparison of Financial Indicators
The financial stress index from Compare the Market assigned South Africa ninth place with a score of 3.93 out of 10. Factors considered when rating countries included average income, housing cost relative to income, rent, cost of living, and unemployment rate.
Luxembourg led the index with a score of 4.78, followed by Ireland (4.75) and the Netherlands (4.35). Portugal, the USA, Norway, Canada, and Australia were also in the top 10, with Denmark finishing the top ten.
Despite housing costs and rent being relatively lower in South Africa compared to many of these countries, unemployment remained a significant distinguishing factor. The house price-to-income ratio in South Africa was 89.3, compared to 121.5 in Luxembourg and 130.5 in the Netherlands. The rental index in South Africa reached 12.8, while it was 47.1 in Luxembourg and 41.4 in Ireland.
The index used an unemployment rate of 32.6% for South Africa. However, the latest quarterly Labour Review from Statistics South Africa set the official level at 33.6% in the second quarter of 2026, which is 0.9 percentage points higher than the previous quarter. This resulted in 8.48 million people being unemployed, which is 345,000 more over three months. Additionally, 3.67 million people were classified as desperate job seekers. Only 39.6% of South Africa's working-age population was employed, while the broader measure of labour underutilization stood at 46.3%.
Debt Solutions 4U's Financial Pressure Index for South Africa for August 2026 showed that applicants typically allocate 58.4% of their net income to debt repayment, leaving R41.60 out of every R100 earned for other household needs.
Debt Situation
Pressure is also noticeable among South Africans who have already sought help regarding their debts. An analysis of 1,174 debt review applications received by Debt Solutions 4U between June and August revealed that applicants were, on average, allocating 58.4% of their net income to debt repayment, leaving R41.60 out of every R100 for other family expenses.
Personal loans accounted for 65.4% of unsecured debt registered in the sample, and credit cards accounted for 21.4%. The study covered a monetary volume of R79.02 million across 5,842 unsecured accounts.
It is important to note that these results do not reflect the overall picture of South African households; they illustrate the financial situation of those who have already contacted Debt Solutions 4U for debt advice.
Cost of Living
Chris Ford, Executive General Manager for Media, Communications, Social Media, and Branding at Compare the Market, stated that financial pressure affects people from different segments of society. He noted: 'It is clear that the cost of living impacts people of all walks of life, and rising household expenses contribute to financial stress for many.'
Ford advised considering options for insurance, financial products, and energy agreements to identify potential savings without necessarily abandoning these services and products.
The international index represents a comparison of selected national economic indicators, not a survey of individual households. Therefore, its findings do not prove that every household in a country with a higher rating experiences more financial pressure than a household in a country with a lower rating.
Monetary comparisons in the study were initially calculated in US dollars and were converted using the exchange rate of US$1 = R16.42 as of September 28, 2026.