South Africans not saving much – FNB

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FILE PHOTO: The buildings with the logos of three of South Africa's biggest banks, ABSA, Standard Bank and First National Bank (FNB) are seen against the city skyline in Cape Town, South Africa, September 3, 2017.REUTERS/Mike Hutchings/File Photo
FILE PHOTO: The buildings with the logos of three of South Africa's biggest banks, ABSA, Standard Bank and First National Bank (FNB) are seen against the city skyline in Cape Town, South Africa, September 3, 2017.REUTERS/Mike Hutchings/File Photo

First National Bank (FNB) on Tuesday said South Africans are financially stretched, with middle-income consumers spending 80 percent of their monthly salaries in the first five days after payment and surviving by 20 percent in the following days.

They said the salaried middle-income consumers with secured and unsecured credit spend, on average, 30 percent of their income on unsecured credit and 35 percent on secured credit.

“The average consumer is stretched financially. The trend also points to a continued culture of consumption, leaving consumers with little to start saving and investing for financial independence,” said Raj Makanjee, the chief executive officer of FNB Retail.

The FNB said the average middle-income consumer earns between 180,000 rands (about 11,289 U.S. dollars) and 500,000 rands per year.

Makanjee encouraged people to save so that they can have “a brighter financial future.”

Senzo Nsibande, the chief executive officer of FNB Money Management, urged consumers to save money and avoid unnecessary spending.

“By evaluating all aspects of their finances, consumers can stretch every rand beyond its potential. This may allow them to begin accumulating cash savings for emergencies and better plan for lifelong decisions such as a comfortable retirement,” he said.

South Africa has been experiencing a low growth rate for years, with high unemployment coupled with rising inflation which leaves people with little disposable income. Enditem

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