South African households already battling rising food prices, fuel costs and mounting debt are expected to face even greater financial pressure following the South African Reserve Bank’s decision to increase the repo rate by 25 basis points.
The latest rate hike comes as new research points to deepening financial distress across South Africa.
Neil Roets, CEO of Debt Rescue, said the organisation’s latest consumer survey shows many South Africans are already at breaking point.
“Our consumer survey findings show that South Africans are already at breaking point financially,” Roets said. “Nine out of ten respondents told us they are under serious financial strain, while more than half said they do not know how they will cope going forward.”
He warned that the latest interest rate increase would intensify an already unsustainable situation for many households.
“The ripple effect will be far reaching among all South Africans and will exacerbate affordability pressures for people servicing home loans, vehicle finance and personal debt,” he said.
According to Debt Rescue, 41% of South Africans now cite inflation on essential goods as their top household budget concern, while 35% expect they will be unable to pay at least one bill or loan in full by June 2026.
The financial pressure is also changing consumer spending patterns dramatically.
Roets said South Africans are no longer cutting luxury spending alone but are increasingly sacrificing essentials such as food and electricity to survive.
“People are now being forced to cut back on food, electricity, water and other basic necessities just to survive,” he said.
Debt Rescue survey data found that 87% of respondents expect to reduce spending on food and household basics due to rising living costs, while 60% fear grocery prices may soon make necessities unaffordable.
Ayesha Hatea, Director of Research and Consulting at TransUnion said households are increasingly shifting into survival mode.
“What we are seeing is a shift toward more deliberate financial behaviour, where households are actively adjusting spending, prioritising obligations and, where they can, building financial buffers,” Hatea said.
The worsening cost of living crisis has also intensified concerns around food insecurity and child hunger.
Disturbing statistics released by the South African Human Rights Commission show that 38% of South African children live below the food poverty line, while more than one in four children under five suffer from stunted growth linked to chronic malnutrition.
Roets described the situation as a growing humanitarian crisis.
“This has escalated to the level of a humanitarian crisis that needs to be managed as a priority by the country’s authorities,” he said.
Roets urged struggling consumers to seek help before financial pressure becomes overwhelming.
“Stress linked to financial strain has real emotional and mental consequences,” he said. “Never ignore the early signs of burnout and seek help early before you develop more serious conditions.”