As the number of people battling over-indebtedness increases, consumers have been warned to be careful about over-spending during the festive season. Statistics by the National Credit Regulator (NCR) showed the number of people with impaired credit records or in arrears with their accounts stands at 10.26 million.
Neil Roets, CEO of Debt Rescue, cited lack of financial education and planning as contributing factors behind consumer overspending during the festive season. “There’s definitely a need for financial awareness because the number of people battling with over-indebtedness keeps growing. We are also seeing more people applying for debt review,” he said.
Roets said many consumers were unable to pay school fees or buy school uniforms due to overspending in December. “People spend because it’s holidays, they believe that they deserve to go on holiday even though they did not plan. They then find themselves in a serious predicament in January,” he said.
South African Savings Institute (Sasi) chairperson Prem Govender said Sasi would visit shopping malls during the festive season. “We will continue to raise financial education and savings levels to the top of our national agenda as savings is a significant national objective. In fact, it is the pressures which the sandwich generation faces that gave rise to the fees must fall campaign,” Govender said. She said that they would work with organisations such as Financial Planning Institute and that responsible spending was the way to go.”
So till Africans continue to spend more than they earn in an environment of growing inflation and rising interest rates. This will be tested by the festive period where many people have become accustomed to overspending. Our message this year is to promote responsible spending ahead of 2016.” She said the Consumer Financial Vulnerability Index showed consumers have been under pressure throughout the year.