Debt levels rise sharply among Gauteng residents

Levels of household debt in Gauteng have escalated over the past two years, the latest Gauteng City-Region Observatory (GCRO) Quality of Life Survey reveals

Gauteng residents are finding it harder to save and household consumer debt has risen 10% since 2013, with 40% of survey respondents indicating that they hold some form of debt.

“Households who earn more money are more likely to also be in debt, presumably due to asset investments, but more concerning is that the uptick in incidence of debt in 2015 over 2013 is most marked in lower income groups,” the report stated.

Middle to upper income bracket earners who take home between R38 401 and R102 400 per month recorded the highest debt levels, rising from 60% to 61%, well above the 40% average.

Those earning between R12 801 and R38 400 per month noted indebtedness levels of 55%, followed by those who earn over R102 401 per month, which remained unchanged at 52%.

The results reflect data recently released by Debt Rescue, which, based on internal data showed that over half of all indebted consumers spend at least three quarters of their monthly pay cheque on servicing debt and that only 23% of South Africans have some money left over at the end of the month, while the rest (77%) are flat broke.

As a result, the number of consumers who are seeking debt counselling from the firm has grown by more than 40% year-on-year, Debt Rescue CEO Neil Roets says.

The ability of Gauteng residents to save also came under the spotlight with the survey worryingly revealing that only 22% of respondents found it easy or very easy to save. When that’s broken down to racial demographics, just 18% of black respondents found it easy to save compared to the 82% of black people who found it difficult or impossible to save at all.

The survey, based on responses from 30 000 people across the province, also found that while residents generally indicated stable levels of satisfaction with regards to key services like water, electricity, health and education, the satisfaction levels failed to translate into high levels of satisfaction with the government.

Just 34% of Gauteng residents indicated their satisfaction with the performance of local government in general, leaving the province wide open for the taking in the upcoming local government and municipal elections.

On the business front, the survey found that entrepreneurship levels among respondents in the province has declined over the past two years with the percentage of business owners dropping from 11% in 2011 and 2013 to 8% in the latest survey results.

The survey also found that 45% of start-ups failed in 2015 compared to 34% in 2013.

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