Middle class drowning in financial stress

0
2034

Half of the middle class spend more than they earn. This leads to financial stress. This is according to the 2017 Sanlam Benchmark Survey, an annual retirement funding study, which also looks into the financial wellness of employees in the workplace.

The survey has revealed that seven out of 10 middle class workers experience some form of financial stress. Indicating that financial stress has reached dangerous levels in South Africa and has become widespread both at the workplace and in the home.

The sample used consisted of 1317 well-educated professionals with 60% earning more than R300000 per annum.

The survey found that almost half the respondents find themselves with a budget deficit a few times a year where their income is less than their outgo. 55% of respondents say the primary source of stress for them comes from their short term debt, while 41% worry that they won’t have enough set aside for unanticipated emergencies.

1 out of 9 say they are simply not coping with their financial stress. While 1 out of 3 copes with their debt by reducing their expenditure.

1 out of 5 respondents has to borrow money from friends and family to makes ends meet and 7 out of 10 believe that they will have to reduce their standard of living when they retire. And 3 out of 5 respondents are not making provision for their medical aid premiums in retirement.

CEO of Sanlam Employee Benefits: Client Solutions, Viresh Maharaj. Photo supplied

CEO of Sanlam Employee Benefits: Client Solutions, Viresh Maharaj says that the research indicates that financial stress impairs the quality of people’s lives and diminishes their ability to be productive at work.

“This is our middle class – the spine of our economy, our tax base and our hope for the future. And they are stressed. We believe that the findings point to a dire need for financial coaching and increased employer involvement in the financial wellness of employees,” he adds.

Trurman Zuma, CE of Sanlam Personal Finance: Savings. Photo supplied

Trurman Zuma, CE of Sanlam Personal Finance: Savings says addressing this issue begins with gaining better understanding of finances.

“While the level of understanding is at an all-time high due to the combined efforts of the media and providers – it is still too low. Our people need help. And, in this context, help means advisors who are able to work with the middle class to educate and help coach them towards consistently displaying the right behaviours and making better decisions.”

Source: Sanlam Benchmark Research
Seithati Semenokane / Courant News