SA saving habits ‘unsustainable’

Johannesburg – South Africa’s saving rate has dropped from 2.7 percent in 2001 to a negative rating of -0.5 percent in the second quarter of this year, the SA Saving Institute said on Tuesday.

Themed “Slow down, New Year ahead”, the SASI launched its annual savings campaign to create awareness among consumers ahead of Christmas and New Year.

“The concern about household preparedness for crisis is made acute by the savings performance of households, which have declined consistently from a saving rate of 2.7 percent in 2001 to a negative saving rate of -0.5 percent in the second quarter of 2008,” the SASI said in a statement.

“Clearly, this picture is unsustainable. However, what is clear from all these negative indicators is that, those people who had put money aside are well prepared to rise above the current economic storm.

“Those who have not saved sufficiently are really feeling the pinch – an important lesson for all of us.”

South Africans have been hard hit by an economic slowdown and high interest rates amidst the global finance crisis.

“All these factors… militate against people’s ability and willingness to save.”

The SASI said South Africans needed to take not to overspend in the festive period.

“Consumers need to be conscious of the need to save and ignore the sale signs as New Year obligations include school fees for many parents,” the SASI said in a statement.

SASI’s partners in the campaign are the department of trade and industry, the financial services board, the national credit regulator, the council for medical schemes and consumer affairs’ provincial offices.

“The DTI wants to make sure that South Africans are armed with all information they need in order to make informed decisions. This includes spending wisely over the festive season and being careful about borrowing money,” said DTI director for consumer affairs Karin Coode. – Sapa