The Momentum Household Wealth Indicator released today shows that the financial wellness of South African households is under pressure. Most households need to work for an income, says the report, and there is not enough planning to allow their income to work for them.
UASA has expressed concern about the financial state of South African households before and this report confirms our view that household liabilities increase at a much faster pace than household income and assets.
We believe with proper financial management, the curbing of corruption and proper project planning, Government can go a long way to relieve the pressure on the wallet and bank account of the man in the street.
The net wealth of South African households has been declining consistently since 1975.
UASA is of the opinion that indirect taxes, e-tolling, the suggestions of a hike in water prices and Government’s trend of the continual tapping of household resources add to the negative pressure on households’ disposable income. This can see the number of households that are “drifting well” drop and the number of households that are “drifting unwell” increase.
The report defines “drifting well” as households that are financially unstable but who can still move to a better position, whereas “drifting unwell” is defined as households that are a financially unstable, but who can easily anchor in that position.
The report also shows that the level of financial wellness improves drastically when the household possesses a higher level of education.
It is clear that South African households should be encouraged to not only save more and be discouraged to use credit for consumption spending, but also to up their levels of education.
On behalf of its members, the average and the poorest of the poor of South Africans, UASA wants to stress once more that it has become impossible for most people to save, and that a good education is out of reach for to many of our fellow countrymen.
We urge Government to review its income generating policies and to end its practice to use the public as a handy cash cow.