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South African consumers are under persistent financial strain, with 39% expecting to miss at least one bill or loan repayment, a survey by global credit reporting agency TransUnion shows.Inflation continues to dominate household anxieties, with 79% ranking it as their top worry — up from 74% a year ago — while only 37% say their income is keeping pace with price increases, TransUnion said in its second-quarter consumer pulse study.High inflation is reshaping how households spend, borrow and save, driving more cautious financial behaviour and softer optimism. The most recent data from Stats SA shows inflation quickened to 4.5% year on year in May. For consumers it means in addition to rising prices, they also face the prospect of another interest rate hike — in other words higher borrowing costs — after May’s 25 basis point adjustment.“Inflation remains the single biggest pressure point for households. Even where incomes are rising, essential costs quickly absorb that relief,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa.“This makes budgeting discipline and financial awareness more important because households need to know where they can adjust when pressure rises,” Hatea said.Bank of America expects the June inflation print, due out next Wednesday, to accelerate further to 4.7%, which could prompt the South African Reserve Bank to lift its benchmark policy rate by another 0.25 percentage points the following day in a fresh blow for households.A study by Debt Rescue last month showed nearly half of consumers would experience severe financial pressure and struggle to manage if interest rates were to rise further, though more than three-quarters saw it as more or less a given.“Consumers are still managing, but the margin for error is shrinking,” Hatea said. “Even modest increases in essential costs are forcing difficult trade-offs, which is reflected in lower confidence and more cautious credit behaviour.” In the TransUnion survey, 43% of respondents said their household finances were better than planned, down slightly from 44% during the same quarter last year while 40% said their finances were worse than planned.The report said the widening gap between income growth and rising living costs is affecting liquidity, raising the risk of missed payments. More than half of consumers said they had cut back on discretionary spending such as dining out, travel and entertainment over the past three months, with just more than a quarter cancelling subscriptions or memberships, while 24% cut or reduced digital services such as wireless, cable TV or internet. Fourteen percent of consumers cut back on retirement savings, another 14% increased their use of available credit while 13% used their retirement savings, signalling that financial resilience is uneven and, for some, deteriorating. Over the next three months, nearly one in four expect their spending on bills and loans to increase while 33% expect higher spending on medical care and services. About 36% expect to increase contributions to retirement funds or investments, though 16% expect to decrease spending in that category. WATCH | How SA’s youth are adapting to a new financial realityThe survey said as digital financial activity grows among consumers, identity protection remains an important concern, with more than half of respondents reporting being targeted by online, email, phone call, or text message fraud attempts in the past three months. The most common schemes were vishing, smishing and phishing, with just more than a quarter of those surveyed having been notified in the past three months that details about their identity or online accounts had been compromised in a data breach. “As digital financial participation increases, security becomes a core part of financial confidence. Consumers need clear, practical guidance on how to protect their information and respond effectively when risks arise,” Hatea said. Households are adjusting spending, managing debt carefully and seeking greater control, but persistent cost pressures are testing their capacity to absorb shocks. “Consumers are doing their best to stay in control in a difficult environment. For lenders and financial service providers, the opportunity lies in supporting that effort through transparent pricing, responsible access to credit and tools that help consumers anticipate and manage financial stress before it escalates,” Hatea said.
