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Financial impact of lockdown – SA Consumers battle to save for retirement

“Apart from spending less on both entertainment and eating out, 24% have cut back on retirement savings, up three percentage points compared to the prior week,” the newly released research by TransUnion shows. In general the research indicated that South African consumers are now more uncertain about the future of their finances through the COVID-19 crisis than they were at the beginning of April, with the number of consumers who have lost their jobs as a result of the pandemic continuing to increase.

“Although the lockdown restrictions are starting to ease, the pandemic continues to create major economic and financial distress for South African economy and consumers alike,” said Lee Naik, chief executive officer of TransUnion Africa. “By understanding consumers’ perceptions of how this crisis is affecting household finances, we aim to better inform consumer, business and government decisions at a time when information on the wider impact of the pandemic is still emerging.”

Here are a few of the findings:

16% of respondents financially impacted by COVID-19 have lost their jobs, up from 10% in the first week of April when the first survey was conducted.
More than eight out of 10 (83%) of consumers have been negatively impacted financially, and nine of out 10 (91%) of these are concerned about their ability to pay their bills and loans.
Consumers are delaying major purchases, with the top three items deferred being vacations and holidays (42%), home improvements (39%) and spending on education, which increased significantly by seven percentage points to 28% from last week.
One in five (20%) reported that they had payment holiday arrangements with their lenders and service providers, with car loans, personal loans and credit cards being the top three products.
Digital fraud schemes continue to increase, with one in four (39%) consumers reporting they have been a target of digital fraud related to COVID-19, up significantly from 25% in week one.

Click here to access the TransUnion media release that shares more insights.

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