A new survey has found that only 35% of South Africans trust their financial abilities and that older age groups had the lowest levels of self-trust.
Sanlam launched its first Sanlam Financial Confidence Index today, an annual index which assesses the financial confidence levels of the country’s adult population.
Sanlam’s study surveyed over 1,500 respondents, representative of the adult South African population with a monthly income of R1,000 or more.
The research found that 81% of South Africans surveyed experience stress when managing their personal finances, and only 35% of South Africans trust their financial abilities.
Sanlam chief marketing officer Mariska Oosthuizen said the country’s economic situation was a contributing factor to these findings, but individual financial acumen could not be discounted.
“Benchmarking the level of financial confidence of South Africans is vital when driving financial education and empowerment initiatives,” she said.
“The public and private sector need to collectively work towards equipping individuals with the necessary tools to build financial confidence.”
Below are some of the key survey highlights:
- Only 35% of respondents trust their financial abilities.
- Individuals aged 40 to 60 exhibit the lowest self-trust levels.
- 57% feel confident identifying suitable financial products.
- 67% exhibit courage in negotiating financial matters.
- 52% have access to credit, and an equivalent percentage rely on friends and family for financial support.
- Only 34% possess insurance coverage for unforeseen financial risks.
- A mere 33% don’t feel embarrassed about their childhood financial situations.
- Only 17% don’t experience unhappiness regarding their current financial circumstances.
Sanlam’s head of adviser transformation, Sipho Mncwabe, said the survey’s findings highlighted a concerning trend in the levels of self-trust among different age groups.
The lowest levels of self-trust were reported among individuals aged 40 to 60 years old. He said this finding underscores a significant gap in financial guidance and education.
“This highlights the need for far greater levels of financial education and advice in order to build self-trust,” he said.
“South Africans have multiple avenues available for boosting their financial management abilities, such as reading materials from dependable sources and engaging a reliable financial adviser.”
Despite a lack of self-trust in their financial abilities, 57% of respondents felt confident in identifying appropriate financial products for their needs.
However, this sentiment was slightly less common among individuals aged 40 and above, suggesting a potential generational gap in financial literacy and awareness.
Younger age groups display higher confidence and self-trust and also demonstrate more proactive financial determination, likely contributing to their ability to identify suitable financial products.
The age-based disparity in confidence could be influenced by different life stages rather than solely indicating a skill deficiency in older individuals.