July 2017

WHAT IS THE SAVINGS & INVESTMENT MONITOR?

Saving & Investment

Behaviours & Attitudes

Annual Survey

Metro

Working

South

Africans

July 2017

METHODOLOGYMAIN SURVEY

Tracking study to look at

trends

Face-to-face interviews

(1 000 HH’s)

Conducted by independent

research house,

Peppercorn Research

Weighted to the SA

working metro population

(AMPS)

Fieldwork dates: 25 April – 24 May 2017

July 2017

DEFINITION OF SAVINGS & INVESTMENTS

And using that

money to pay

debt faster, like

putting extra into

your home loan

Into savings

accounts,

policies &

investments

Holding

back on

spending

Putting

money

away

July 2017

HISTORY OF THE SAVINGS & INVESTMENT MONITOR

Nov

2009July

2010Nov

2010Nov

2011July

2014

BabyBoomers &

High IncomeMarket

Debt & Z-Generation

July

2015Nov

2012

Public Sector

July

2013

Youth

July

2012

Women

July

2011

Stokvels

July

2016

Household,Behavioural

Shifts

July

2017

Entrepreneurs

(Self Employed & “Slashers”)

July 2017

IMPRESSIONS ABOUT OUR COUNTRY…………………

“Thinking about our country at the moment, what 3 words come to mind?”

July 2017

CONFIDENCE IN THE SOUTH AFRICAN ECONOMY

Decline in 2016 has been maintained

58% 55% 55% 52% 55%

31% 34%

2011 2012 2013 2014 2015 2016 2017

2017: Gauteng 43%, KZN 31%, W.Cape 17%

July 2017

6.97.1

7.2

6.9

6.36.2

6.5

5.7

6.36.5 6.5

6.0

5.7

6.0

2011 2012 2013 2014 2015 2016 2017

SLIGHT RECOVERY IN MINDSET ABOUT FINANCES, BUT STILL AT LOW LEVELS

Satisfaction with

current financial

situation (out of 10)

Confidence in

making financial

decisions (out of 10)

July 2017

57% 55% 58% 65% 68% 63% 62%

17% 16% 15%15% 12% 16% 16%

8% 7% 7%6% 5% 6% 7%

18% 21% 20% 14% 15% 15% 15%

2011 2012 2013 2014 2015 2016 2017

Savings

Insurance & Medical Aid

Debt

Consumption / Living Expenses

% OF INCOME SPEND

July 2017

57% 65%

19%14%

8% 6%

17% 15%

Public Private

Savings

Insurance & Medical Aid

Debt

Consumption / Living Expenses

% OF INCOME SPEND – PUBLIC VS PRIVATE SECTOR (2017)

July 2017

SAVINGS & INVESTMENTVEHICLES USED

SAVINGS & INVESTMENT VEHICLES USED

10%

20%

30%

40%

50%

60%

70%

80%

2010 2011 2012 2013 2014 2015 2016 2017

Banked cash savings

Funeral policies

Life assurance / death &

disability cover

Pension / provident fund

Education policies

RA

Informal savings (Black)

Have neither pension /

provident nor RA

July 2017

63%59% 56%

44%40% 40%

46% 44%

SAVING FOR CHILDREN’S EDUCATION STILL A CONCERN

2010 2011 2012 2013 2014 2015 2016 2017

So, in 2017,

56% are

NOT saving

Have Education Policy and/or say they are saving for education

July 2017

SAVING FOR CHILDREN’S EDUCATION – LOWER INCOME HOUSEHOLDS

IMPACTED THE MOST

2010 2011 2012 2013 2014 2015 2016 2017

56%

29%

73%

37%

70%

43%

57%

56%54%

58%

20%

30%

40%

50%

60%

70%

80%

90%

2010 2012 2016 2017

< R6k

R6k - R13 999

R14k - R19 999

R20k - R39 999

R40k+

HH Income pm

July 2017

INFORMAL SAVINGS

INFORMAL SAVINGS

50

4248 50

45

58 5953

49

29

3733

29 3134 32

19

1014

11 1215

18 1617

84 4

96

17

9

2010 2011 2012 2013 2014 2015 2016 2017

Stokvels

Burial Societies

Grocery Schemes

Unbanked Cash

Savings

88% of informal savers are black

(based on black households)

July 2017

2017 Household Income

13% 26% 40% 38% 42%<R6k pm R6-14k pm R14-20k pm R20-40k pm >R40k pm

INCIDENCE OF BELONGING TO MORE THAN ONE STOKVEL STILL PREVALENT

July 2017

WHAT ARE STOKVEL PAYMENTS USED FOR?

Saving for a rainy day 44%

Saving to pay off debt 43%

Purchasing groceries at end of month 31%

Purchasing furniture & appliances 31%

Saving for education 25%

Purchasing clothing 18%

Saving for something specific 16%

July 2017

INFORMAL SAVINGS – STOKVELS Contribution amounts (R)

685

405

672

612

961

1279

715

368

624

891

930

1595

677

431

568

718

794

1608

666

299

515

885

933

1536

Overall

Less than R6k

R6k – R13 999

R14k – R19 999

R20k – R39 999

R40k+

2017 2016 2015 2014

(based on black households)

July 2017

(based on black households)

BORROWING FROM STOKVELS

July 2017

Approximately

50% Have borrowed

at least once in

the past year

R4 660on average

Used for:

School fees 32%

Pay off debt 24%

Groceries 23%

DEPENDENCY

26%

34%40% 38% 39% 41%

45%

37%

DEPENDENCY ON CHILDREN

“My children should look after me when I am old”

2010 2011 2012 2013 2014 2015 2016 2017

HH income pm< R6k 53%>R40k 22%

July 2017

DEPENDENCY ON GOVERNMENT

“The government will take care of me if I am unable to take care of myself”

30% 32%

38%

31% 32%36%

32% 33%

July 2017

2010 2011 2012 2013 2014 2015 2016 2017

STILL HIGH EXPECTATION OF HAVING TO SUPPORT FAMILY/PARENTS

IN FUTURE

50%

48%

48%

55%

58%

58%

2012

2013

2014

2015

2016

2017

July 2017

THE OLD MUTUAL SANDWICH GENERATION INDICATOR

20%23%

21%23%

25%29% 28%

2011 2012 2013 2014 2015 2016 2017

2011 2012 2013 2014 2015 2016 2017

July 2017

SANDWICH GENERATION - BY INCOME

21%

24%

21%

17%16%

15%

26%

22%

30%

24%

21%22%

30%28%

25%

34%

31%

34%

26%25%

26%

34%

26%28%

21%

Less than R6k R6k – R13 999 R14k – R19 999 R20k – R39 999 R40k+

2013 2014 2015 2016 2017

Monthly Household Income

July 2017

SANDWICH GENERATION – BY GENERATION

18%

24%

18%19%

30%

16%

22%

29%

17%

30% 31%

26%28%

31%

22%

Gen Y Gen X Baby Boomers

2013 2014 2015 2016 2017

July 2017

APPROXIMATELY 1 in 2……18 – 34 YEAR OLDS LIVE AT HOME

WITH PARENTS

45%

46%

42%42%

49%

38%

40%

42%

44%

46%

48%

50%

2013 2014 2015 2016 2017

July 2017

DEBT

17%

20%

16%

21%

14%

6% 7%

10%

15%13%

3% 3% 4%

8%6%

2013 2014 2015 2016 2017

A financial institution

A friend / relative

A micro lender

PERSONAL LOANS – DECLINE IN THOSE FROM FINANCIAL

INSTITUTIONS

July 2017

STILL BORROWING FROM FAMILY/ FRIENDS, BUT…………..

12%

5% 5%3% 1%

13%

9%

4%5%

0%

18%

12%

8%

4% 4%

27%

16%15%

9%

5%

21%

16%

13%

9%

4%

Less than R6k R6k – R13 999 R14k – R19 999 R20k – R39 999 R40k+

2013 2014 2015 2016 2017

July 2017

FAMILY/ FRIENDS ARE CALLING IN LOANS EARLIER…OR……..

BORROWERS ARE WANTING TO PAY OFF FASTER

45%47%

38%

43%

34%

26%

0%

10%

20%

30%

40%

50%

60%

2012 2013 2014 2015 2016 2017

“I pay irregularly/only when I can.”

July 2017

LIVINGEXPENSES

86%(88%)

84%(85%)

83%(86%)

79%(78%)

74%(76%)

69%(65%)

63%(65%)

59%(60%)

58%(61%)

Holiday / travel Having friends

around /

entertaining at

home

Eating

out/entertainment

Alcoholic

beverages

Shoes & clothing Cigarettes Hair / beauty Food & groceries Domestic

worker/gardener

July 2017

CUTTING BACK ON EXPENSES What categories are South Africans cutting back on / looking for cheaper options?

LUXURIES

% who are cutting back / looking for cheaper options

ESSENTIALS52%

36% 36% 36% 33%

21% 19% 19% 18%

Cell phone

airtime

DStv /

M-Net

Assistance

payments

to children /

dependents

Electricity /

water

Armed

response

Transport to

work

Car & household

insurance

Accommodation Children's

education

July 2017

What categories are South Africans cutting back on /

looking for cheaper options?

% who are cutting back / looking for cheaper options

INCOME HAS NOT COVERED LIVING COSTS (at least once in the last year)

78%

58%

46%

40%

25%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

< R6k

R6k - R13 999

R14k - R19 999

R20k - R39 999

R40k+

HH

income

pm

July 2017

WHEN INCOME AND EXPENSES DO NOT MEET……WHAT DID YOU DO?52%..... this has happened at least once in the past year.

67%

24%

32%

17%

34%

56%

36%

24% 22%

36%

58%

37%

19% 19%

35%

42% 41%

21%17%

44%

Borrow from a friend /

relative

Use savings Pay bills late /

miss payments

Personal loan from

institution or micro

lender

Borrow from my stokvel

(based on those who

contribute)

Less than R6k R6k – R13 999 R14k – R19 999 R20k+

July 2017

WHEN INCOME AND EXPENSES DO NOT MEET…………

Pay bills late/miss payments

19%

33% 34%

22%32%

24%19% 21%

Less than R6k R6k - R13 999 R14k - R19 999 R20k+

2016 2017

July 2017

WHEN INCOME AND EXPENSES DO NOT MEET…………

Borrow from my stokvel (based on those who contribute)

41%48%

40% 41%34% 36% 35%

44%

Less than R6k R6k - R13 999 R14k - R19 999 R20k+

2016 2017

July 2017

TO STRETCH THEIR BUDGETS FOR GROCERIES – MORE HOUSEHOLDS

ARE BUYING IN BULK

92%

60%

54%

54%

91%

61%

67%

54%

Looking out for discounts /

specials

Using a cheaper supermarket for

some / all groceries

Buying in bulk

Changing to cheaper brands

2016 2017

July 2017

ENTREPRENEURSSelf Employed &

“Slashers”

SELF EMPLOYED

DECLINE IN SELF EMPLOYED

12% 12% 12% 12%

8%

0%

5%

10%

15%

20%

25%

30%

2013 2014 2015 2016 2017

How was business funded?

Used own savings/investments

68%

Loan from family/ friends 22%

July 2017

ENTREPRENEURIAL APPETITE & BARRIERS

Barriers to starting your own business

Lack of funding 48%

Am not brave enough/don’t have the courage

16%

Can’t think of a good idea/ not sure what to do

16%

I don’t have the time 15%

I think about it all the time/

think about it a lot

Gen Y 26%

Gen X 30%

Baby Boomers 17%

July 2017

“SLASHERS”(EMPLOYED BUT WITH SIDELINE

JOB/BUSINESS DISSIMILAR TO PRIMARY JOB)

SLASHERS

Currently earn additionalincome, over and above your

normal job

Yes – something

similar to my

current job

13%

Yes – something

that is not at all

similar to my

current job

24%

No 63%

Base: 943 working individuals earning R5k+ per month

Which job would you prefer to

make a career out of?

Current job: 47%

Other job: 53%

July 2017

WHY MORE THAN ONE JOB………?

55%

45%

43%

38%

37%

37%

31%

29%

29%

26%

We like to live comfortably and additional income helps

We are saving for a rainy day

To pay off debt

Financially we cannot make ends meet

We want to retire more comfortably

Need to take care of my family (e.g. parents, siblings)

We are saving to travel

Saving for children's education

We are saving to leave something to our children

We are saving to buy a house

July 2017

SLASHERS – 2nd Jobs

Event

planner

Hiring

HR consultancy

Bookseller

Cash wash

Sell stationery

to schools

Grow and sell vegetables

Catering

Barber

Online boutique

Installing water

treatment equipment

Sell Herbalife

Tutor

Garden

service

Musician

Nail

technician

Manufacture

kiddies clothing

Sell “flat

stomach” tea

PhotographerCarpentry

Errand runner /

messenger

Internet

café

Make costume

jewellery

Waitressing

Party equipment

July 2017

SLASHERS - ATTITUDES

Having more than one job has impacted my family life/personal life

negatively

17%

I find it difficult to manage everything in my life by having more than one job

26%

I don’t have time for more than one job, but financially I need the money

42%

Financially I don’t really need more than

one job14%

I enjoy having more than one job 63%

% Agree

July 2017

THANK YOU