South Africans are heading into 2026 feeling slightly more confident about their finances, but the reality beneath the surface remains sobering. Although interest rate cuts, easing inflation, and access to retirement savings provided short-term relief in 2025, structural debt pressure continues to weigh heavily on households, according to DebtBusters’ 2025 Q4 Debt Index.
Now in its tenth year, the index offers a long-term view of consumer debt in South Africa. Its latest findings point to a familiar tension: improving confidence alongside a steadily eroding financial foundation.
2025: why it felt better
Consumers received some welcome relief in 2025. A series of interest rate cuts, totalling 150 basis points since late 2024, reduced the cost of servicing financed assets. At the same time, the two-pot retirement system provided temporary cashflow support for those who chose to dip into their savings. Inflation also eased, delivering one of the lowest annual readings in decades. Together, these factors helped lift confidence going into 2026.
Benay Sager (pictured), executive head of DebtBusters, said the release of the Q4 2025 Debt Index aligns with National Debt Awareness Month’s theme, Know your Debt. “2025 was a better year for South Africans’ finances compared to the prior few years,” he said.
There are also signs that consumers are engaging more actively with their finances. Subscriptions to online debt management tools rose by 41% compared with the same period last year, while platforms such as MyMoney Saver are helping households to stretch increasingly strained budgets.
Despite these gains, the underlying trajectory remains troubling. Over the past decade, electricity tariffs have increased by 165%, petrol prices by 74%, and cumulative inflation by 49%. Income growth has failed to keep pace.
As a result, consumers who applied for debt counselling in the fourth quarter of 2025 needed 71% of their take-home pay just to service their debt – the highest level recorded since 2017.
Credit as a financial lifeline
Reliance on high-cost, unsecured credit has intensified. A record 96% of applicants had personal loans, while 59% relied on one-month payday loans, underscoring how unsecured credit has become a financial lifeline for many households.
Consumers are also juggling more complex credit arrangements. The average number of active credit agreements has climbed to 8.7, reflecting increasingly fragmented borrowing across multiple lenders.
Among higher earners – those taking home more than R35 000 a month – unsecured debt is now 75% higher than a decade ago, far outstripping both inflation and income growth.
Financial stress is also shifting up the age curve. The average age of new debt-counselling applicants has risen to 40, while those aged 45 and older now make up 31% of applicants, compared with 20% in 2016.
The data suggests that debt stress is no longer confined to younger or lower-income consumers but is increasingly affecting older households with more complex financial obligations.
Many of these pressures were already evident a year ago. In the fourth quarter of 2024, consumers needed 68% of their take-home pay to service debt. Personal loans were held by 82% of applicants, and 52% relied on payday loans. Top earners were spending 74% of their income on debt repayments, while unsecured debt for this group had risen 60% since 2016.
What changed in 2025 was not the direction of the trend, but the pace. Lower interest rates, easing inflation, and access to retirement savings softened the immediate blow, delivering short-term relief and lifting confidence – without altering the underlying imbalance between income and expenses.
Ten years on: less money, more debt
A decade of DebtBusters data highlights how far consumers’ financial resilience has eroded. Although nominal net incomes have increased by about 2% since 2016, inflation over the same period has reduced real purchasing power by nearly half.
In real terms, consumers today are taking home 47% less than they did a decade ago. That erosion has translated into heavier debt burdens. Consumers entering debt counselling now need 71% of their income to service debt, while top earners use 85% of their income for repayments and carry a record debt-to-income ratio of 210%.
Taken together, the 10-year view reveals a clear tension: confidence may be improving, but the fundamentals are weaker than they were a decade ago.
DebtBusters expects demand for debt management services to continue rising through 2026, particularly as regulated price increases for electricity and municipal services take effect.
The index points to a dual reality for consumers. Temporary relief has eased immediate pressure, but structural debt stress, heavy reliance on unsecured credit, and growing strain among older consumers pose lasting risks.
Sager said awareness remains the critical first step. “Knowing your debt and understanding your total credit exposure is crucial,” he said. “Debt counselling remains one of the most effective ways to restructure debt, reduce financial strain, and restore economic agency for consumers.”
