South Africans are among the world's most financially stressed - IOL

Financial pressure is affecting people across different income groups.

South Africa ranked ninth in a 32-country financial stress index, while separate local research found that people seeking debt relief were typically spending more than half their take-home pay on repayments.

This comes as people seeking debt review through Debt Solutions 4U were typically committing R58.40 of every R100 of net income to debt repayments before rent, transport, food and other living costs.

That was the median debt repayment burden among applicants seeking help from Debt Solutions 4U, adding a household-level perspective to new international research that placed South Africa among the 10 most financially stressed countries in a comparison of 32 nations.

Compare the Market's financial stress index ranked South Africa ninth, with a score of 3.93 out of 10. The research assessed countries using average income, house prices relative to income, rental costs, living expenses and unemployment.

Luxembourg topped the index with a score of 4.78, followed by Ireland at 4.75 and the Netherlands at 4.35. Portugal, the US, Norway, Canada and Australia also ranked above South Africa, while Denmark completed the top 10.

Although South Africa had comparatively lower housing and rental costs than many of these countries, unemployment remained a significant distinguishing factor.

Its house-price-to-income ratio was 89.3, compared with 121.5 for Luxembourg and 130.5 for the Netherlands. Its rental index was 12.8, against Luxembourg's 47.1 and Ireland's 41.4.

The index used an unemployment rate of 32.6% for South Africa. However, the latest Quarterly Labour Force Survey from Statistics South Africa put the official rate at 33.6% in the second quarter of 2026, up 0.9 percentage points from the previous quarter.

This left 8.48 million people unemployed, an increase of 345,000 over three months. Another 3.67 million people were classified as discouraged jobseekers. Only 39.6% of South Africa's working-age population was employed, while the broader labour-underutilisation measure stood at 46.3%.

Debt Solutions 4U's August 2026 South African Financial Pressure Index found that applicants were typically committing 58.4% of their take-home pay to debt repayments, leaving R41.60 of every R100 earned for other household expenses.

The pressure is also visible among South Africans who have already reached the point of seeking assistance with their debts.

Debt Solutions 4U's August 2026 South African Financial Pressure Index examined 1,174 debt review applications received between June and August. It found that applicants were typically committing 58.4% of their take-home pay to debt repayments, leaving R41.60 of every R100 earned for other household expenses.

Personal loans accounted for 65.4% of the unsecured debt balances recorded in the sample, followed by credit cards at 21.4%. The research covered monetary value of R79.02 million across 5,842 unsecured accounts.

These findings are not representative of South African households generally. They reflect people who had already approached Debt Solutions 4U for debt review and therefore illustrate the financial position of those seeking help, rather than the average household.

Compare the Market's financial stress index ranked South Africa ninth, with a score of 3.93 out of 10.

Compare the Market's executive general manager of Media, Communications, Social and Brand, Chris Ford, said financial pressure was affecting people across different income groups. “It's clear the cost of living is having an impact on people from all walks of life, with rising household expenses contributing to financial stress for many,” Ford said.

Ford suggested reviewing insurance, financial products and energy arrangements to identify potential savings without necessarily giving up those products and services.

The international index is a comparison of selected national economic indicators, rather than a survey of individual households. Its findings therefore do not establish that every household in a higher-ranked country experiences greater financial pressure than one in a lower-ranked country.

The research's monetary comparisons were originally calculated in US dollars and we converted using US$1 = R16.42 as at 28 September 2026.