South Africans struggling to build wealth

Most South Africans are struggling to build wealth due to financial pressures, with many people forced to take on side jobs to make ends up.

The latest annual 1Life Insurance Generational Wealth Survey found that 55% of respondents had to supplement their income by taking on another job or starting a side hustle.

Of these, 44% rely on this extra income to cover their monthly expenses, while only 3% can use it for leisure activities such as travel and entertainment.

Alarmingly, 65% of respondents stated that, when considering their current financial situation, they cannot afford to generate wealth.

The report found that South Africans’ financial well-being remains under pressure, with as many as 56% of respondents indicating that they are merely surviving and 29% admitting they are struggling.

The ones that are coping constitute only about 15%, where 12.9% described their financial situation as comfortable and 2.4% described themselves as thriving.

Notably, these findings correspond with many pension funds, which noted that most clients who have been taking out their two-pot retirement savings have been doing so.

Guy Chennells, Chief Commercial Officer at Discovery Corporate and Employee Benefits, explained that the data was gathered from employees who submitted withdrawal requests via a secure and user-friendly WhatsApp channel.

“Responses showed that the main reason our members withdrew from their savings was to resolve home or car expenses (24%). This was closely followed by a need to pay off short-term debt (21%),” he said.

“We found it surprising that a big group of members (20%) were using the extra money for education, presumably in the majority of cases for children’s school fees, as well as for day-to-day expenses (11%).”

“Sadly, these are all indications of the cost-of-living crisis faced by so many.”

Encouragingly, the 1Life survey found that awareness of generational wealth is growing, with 70% of respondents defining it as both money and assets such as property or land.

Specifically, 78% associate generational wealth with property and land, while 74% associate it with cash and savings – an increase of 10% compared to the 2024 survey.

“The results of the 2025 survey reflect the reality that many South Africans face daily,” said Hayley Parry, Money Coach and Facilitator at 1Life’s Truth About Money.

“While financial pressures persist, we are seeing an encouraging increase in the recognition of generational wealth, particularly in property, savings, and insurance.”

“It is promising to note that half of the respondents acknowledge life insurance as a tool for wealth generation, which is a crucial step toward financial security.”

Despite a lower inflation rate in the past year, only 13% of respondents reported being in a better financial position compared to the previous year.

However, 25% of respondents managed to pay more towards their debt, paving the way for long-term financial freedom, while 26% indicated they are now able to save money. For 34% of respondents, financial conditions remained unchanged.

Debt remains a major concern, with 45% of respondents allocating more than 30% of their take-home income to servicing their debt.

Within this group, 19% spend more than half of their salary on debt repayments, leaving them with little room for wealth accumulation and savings.

“The findings reinforce the urgent need for effective financial planning and education to help South Africans achieve financial security,” Parry added.

From an insurance standpoint, the survey found that around 75% of insured individuals managed to maintain their premium payments, demonstrating a commitment to protecting their financial futures despite economic hardships.

“As South Africa prepares for the upcoming National Budget Speech, it is critical for policymakers to address these financial struggles and for the private sector to also continue driving consumer financial education and implement measures that support debt relief, wealth creation, and financial resilience.”