South Africa’s ‘sandwich generation’ under pressure

South Africa’s “sandwich generation” is facing financial and emotional pressure from caring for both their parents and their children. 

With South Africa’s shifting demographics and the rising cost of health care, this can be detrimental to the finances and emotional well-being of such households.

The sandwich generation is typically in their 40s and 50s and make up nearly half of the people within this range, said Turnberry Risk Management Solutions CEO Tony Singleton. 

He said that South Africans living longer and people delaying parenthood are causing demographic shifts in South Africa. 

This group of individuals experience greater financial difficulty than people who only support their ageing parents. 

Additionally, these people also deal with a higher emotional strain because of this dual caregiver role. 

This manifests in stress, burnout, and work-life balance challenges. 

A factor significantly contributing to the financial strain on individuals is the rising cost of healthcare. 

Singleton pointed out that medical aid premiums rose by an average of 9.3% to as high as 12.75% in 2025, with medical inflation consistently outpacing the Consumer Price Index (CPI).

To be more affordable to consumers, many opt for cheaper medical plans which cover fewer medical expenses. 

This can lead to people needing to spend more on unplanned, out-of-pocket medical expenses. 

Due to this heightened financial stress, people from this demographic make the most significant number of two-pot withdrawals. 

People in the sandwich generation have to care for the generations before and after them, which necessitates weighing current financial needs against future financial needs. 

This strain on household revenue saw people withdraw from their retirement savings early to cover expenses and short-term debt. 

Additionally, people who are in lower-income classes are more likely to be exposed to these pressures. 

Another part of the problem is South Africans’ poor saving culture. South Africans’ savings amounting to a measly 0.13% of GDP. 

This can be due to various factors, since saving is a personal choice in South Africa. 

The factors that lead people to not save as they should, include people living beyond their means, a lack of financial literacy and high levels of indebtedness. 

The Gordon Report also found that only about 16% of south Africans save for the future, as opposed to a high of merely 30% a couple of years ago. 

Furthermore, the high level of indebtedness creates a vicious cyle where people borrow money to sustain their lifestyles, which ends up further diminishing their incomes. 

Besides roughly 65% of South Africans’ monthly income being used to cover debt, the low savings rate has another troubling impact on the economy. 

When people do save, the money is often invested into companies and the local economy. This makes capital available for businesses to grow. 

However, with less than 1% of the amount of GDP being saved in South Africa, there is little capital being made available to have businesses grow. 

This lack of growth of business, exacerbates the low unemployment rate, which South Africa having youth unemployment of about 45%. 

This means that people have to rely on their parents for longer and postpones the start of their future savings. 

Due to high unemployment rate and subsequent increased labour market competition, Sanlam corporate even postponed the average age at which people start earning a salary to 30. 

So, people’s financial habits and the economic circumstances in South Africa put additional pressure on the sandwich generation than needs to care for their parents and children.