These spending habits are set to change for good in South Africa after lockdown
Old Mutual has published its latest savings and investment monitor, highlighting the expenses that South Africans will prioritise during and after the coronavirus lockdown.
The research was conducted with a particular focus on how people are being affected by the economic downturn and the financial implications of the Covid-19 pandemic, and attracted 1,500 respondents.
Old Mutual also focused on which changes in spending are likely to become ‘permanent shifts’ even when the lockdown restrictions end.
The findings shows that eating out and entertainment expenses are most likely to get the chop, followed by take-aways, and having friends at home.
At the other end of the scale, medical aid, accommodation and insurance are the least likely expenses to get cut.
The rebased figures below indicate shifting spending patterns of people who already spend in the respective category.
“Looking specifically at those categories where we will spend less, it is notable that younger consumers are more reluctant to spend less on entertainment, take-aways, eating out and travel, whilst 50+ year olds are less likely to cut armed response, insurance, assistance to children and medical aid,” Old Mutual said.
Old Mutual further applied a ‘factor analysis’ to the results to help group these expenses into a more meaningful presentation.
After doing so, the group said that five categories of expenses emerge as follows.
“Not only are absolute income levels under pressure as many take salary cuts, but demands on share of wallet are increasing as never before,” Old Mutual said.
“A third of consumers find that they are having to support more people financially than they did before the pandemic. Couple that with a constant fear of retrenchment or loss of income and no wonder stress levels have skyrocketed.”
However, Old Mutual noted that South Africans have consistently shown their ability to ‘make a plan’ when times get tough.
“Indebted consumers are reaching out to creditors and making use of the relief measures on offer (for home loans in particular). Loyalty programme members are mining those for rewards wherever they can.
“All are reaching out to friends and family for help if needed, and helping out where they can.”