Drowning in Debt: Why South Africa’s Richest Are Struggling to Stay Afloat

When South Africans talk about financial stress, the focus often falls on middle-income households trying to stretch their salaries across bills, food, and rising costs. But according to the latest Credit Stress Report by Eighty20, even the country’s wealthiest are drowning in repayments.

The Heavy Hitters Under Pressure

South Africa’s so-called “Heavy Hitters” – the top 5% of earners – are spending almost half their monthly income on debt instalments. That’s 48% of their take-home pay disappearing into bond repayments, credit cards, and other loans.

Collectively, this elite group holds a staggering R1.7 trillion in debt, making up 65% of the country’s total. Home loans dominate, sitting at R1 trillion, but what’s worrying analysts is the sharp rise in overdue balances. In just one quarter, unpaid home loan debt jumped 4.6% to R11.8 billion.

For a segment that many assume is financially bulletproof, these numbers are a wake-up call.

Middle-Class Squeeze

It’s not just the wealthy who are in trouble. South Africa’s middle class, about 3.6 million people strong, is devoting 37% of income to repayments. While they aren’t piling on debt at the same rate as the top earners, their unsecured loans – from personal credit to retail accounts – continue to climb.

Unpaid credit card balances for this group rose 1% in the last quarter, with overdue home loan debt up by 4%. For a group already grappling with stagnant salaries and higher living costs, the debt trap is tightening.

Everyday South Africans Turning To Retail Credit

Further down the income ladder, mass-market consumers – many of whom rely on store credit and short-term loans – are now committing about 19% of their earnings to repayments. Over two million new loans were taken out in the last quarter alone, most of them retail or unsecured.

Credit card use surged by 7% in this segment, pushing overdue balances up to R5 billion. While defaults dropped slightly, more than half of these consumers are still behind on payments.

Retirees Not Immune

Even retirees, once thought to be more financially stable, are seeing rising debt levels. Comfortable Retirees now spend 22% of their monthly income on repayments, up from 21% a year ago. More than half of their new loans are unsecured, pointing to rising reliance on credit to cover everyday costs.

Why It Matters

The report reflects a deeper cultural reality: debt is no longer just a middle-class struggle but a nationwide balancing act. South Africans across the spectrum – from luxury homeowners in Sandton to pensioners in Durban – are leaning on loans to keep up with living standards.

On social media, reactions have been mixed. Some users mocked the “rich people’s problems” of ballooning bond payments, while others pointed out the bigger issue: if the country’s highest earners are struggling, it signals a system under strain for everyone.

The Bigger Picture

South Africa’s debt-to-income ratios are climbing at a time when inflation is cooling and petrol prices have improved. In theory, households should be breathing easier. Instead, overdue balances on big-ticket items like mortgages are rising, suggesting that lifestyle costs and high-interest credit are outpacing income growth.

For the wealthy, it’s a case of living large but paying dearly. For the middle class, it’s the slow grind of salaries that can’t keep up. And for retirees and the mass market, it’s survival on credit.

The latest numbers confirm what many South Africans already feel: no matter your income, debt is an anchor pulling households deeper underwater.

Source:Business Tech 

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