SA households squeezed from both ends

The loss of 190,000 formal-sector jobs was one of the reasons behind a sharp increase in people surrendering life insurance policies.

South African households are being squeezed from both ends as jobs disappear and debt climbs, with new data showing 190,000 formal-sector jobs were lost in the first quarter while people with comparatively healthy salaries are increasingly seeking help with unmanageable debt.

The latest Altron FinTech Household Resilience Index (AFHRI), released on Wednesday, shows household finances remained stronger than a year ago, helped by lower interest rates, but weakened during the quarter as employment, private-sector salaries and household spending came under pressure.

The loss of 190,000 formal-sector jobs was one of the reasons behind a sharp increase in people surrendering life insurance policies, according to the index. Life policy surrenders increased 24.3% year-on-year and 3.9% during the quarter.

Altron FinTech MD Johan Gellatly said the jobs number was central to what was happening to household finances.