Fascinating results revealed in this Old Mutual research
including details on the sandwich generation
financially supporting grandparents, children,
grandchildren and other relatives
Millions of South Africans are feeling heightened financial pressures due to the Covid-19 pandemic and lockdown as well as the recent unrest that unfolded in some of our provinces, says Old Mutual.
The Old Mutual Savings and Investment Monitor (OMSIM) annual research report is a clear indicator of how the habits and behaviours of working metropolitan households are shifting.
“There is no doubt that consumers are having to take a much closer look at the way they manage their money, and many are having to adapt their lifestyles to survive,” states Lynette Nicholson, Head of Research at Old Mutual.
To build on the 2021OMSIM findings, Old Mutual conducted an additional ‘rapid results’ survey in July to assess whether the recent unrest had further eroded people’s sense of wellbeing.
This July survey revealed that people’s confidence in the South African economy dropped a further 3%, from 34% to 31%, the lowest level recorded in the history of OMSIM. The percentage of respondents who made emergency funds a priority also went up – from 37% to 40% – over this short period of time.
An interesting new statistic revealed in the July report showed that 23% of the working metropolitan population say they are checking/have checked that they have enough insurance protection in place.
The research also indicates that although job and income security remain the top financial priority for 65% of working metropolitans surveyed, they are also prioritising the way they manage their money. Around 62% of households are cutting expenses where they can, 50% (up 10% from 2020) are prioritising paying off their debts and 37% are now making sure they have enough emergency funds, up from 33% in 2020.
The survey also found that:
- 39% of respondents have switched to cheaper supermarket brands
- 25% moved to a cheaper cell phone or data options
- 31% replaced gym subscriptions with exercising on their own/at home
- 18% moved in with family members and 16% had family members move in with them to reduce living expenses
- 69%, are taking advantage of rewards and loyalty programmes that offer opportunities to pay less for everything from fuel to food and other household produ This is up from 54% in 2020.
A leading trend identified by the research has been the growth of multi-earners, or “Poly- Jobbers”, a term Old Mutual coined for those working metropolitan individuals who have more than one job and more than one source of income.
A significant 47% (10% more than in 2017) of the research respondents are Poly-Jobbers. This enterprising group combine their permanent employment with another form of formal employment (contract work) or a side hustle (informal employment).
Furthermore, the OMSIM 2021 research shows that one in three (34%) respondents do not have enough savings to last more than a month (at most) if they lost their income/jobs.
To add to the concerning state of people’s financial situations and the high or overwhelming financial stress experienced by 56%, there is also a continuation of multi-generational dependency.
More than half (51%) of respondents have adult dependents, one in three (31%) say they are giving support to more people since the start of Covid, and 43% are part of the sandwich generation, financially supporting ageing parents and/or grandparents as well as their own children and/or grandchildren and other relatives.
Not surprisingly for a nation known for its optimism and positive outlook, 61% of the survey respondents believe the financial outlook will “improve” in the next six months. Generation Z (currently 18 – 25 years old) is the most positive at 78%, while only 39% of the Baby Boomer generation (57+ years old) believe things will improve.
“With all the uncertainty we have experienced over the past year, one thing is certain and that is that there has never been a more important time than now to take control of your finances, get expert financial advice and plan carefully for today, tomorrow and your long-term future,” says Nicholson.
Click here to learn more about savings for a rainy day.
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