A large number of South Africans earning at least R15,000 a month are delaying retirement because they simply can’t afford it, a survey found.
South Africans’ spending habits and aspirations were at odds with reality, a survey by money lender Wonga has shown.
Meanwhile, research also shows that many people are simply too broke to afford retirement.
According to the 2019 Old Mutual Savings and Investment Monitor’s latest findings, a large number of South Africans earning at least R15,000 a month were delaying retirement because they simply could not afford it.
The survey results showed that half of the country’s retirees were working for an employer, 36% had started a business post-retirement, while 13% continued to be self-employed or took up a position as a consultant.
“Including this demographic into our study, reveals the impact that many households suffer because they are financially under-prepared for their retirement,” said Lynette Nicholson, research manager at Old Mutual.
“The lack of preparedness for retirement could be measured to some degree by only 4% of respondents leaving their pension or provident fund lump sum intact and opting to receive a monthly pension,” Nicholson says. “This is the ideal situation as these pensioners should be better equipped over the long term to survive financially.”
She added that the 21% of respondents who took the entirety of their pension in a lump sum were potentially the least prepared, while the 75% who took a portion as a lump sum and the rest as a monthly pension made a far wiser decision.
Despite the fact that 52% of the survey’s respondents claimed that financial constraints prevented them from paying off their debt, almost 90% of South Africans aimed to earn as much as the nation’s wealthiest 10%, with many aspiring to drive luxury cars and own multiple properties, despite significant financial constraints.
The survey, which quizzed more than 8,000 people, found that paying off debts was lower on respondents’ priority list because their main concern was keeping a roof over their heads.
“More than half considered paying for housing and groceries as their most important monthly expenses and over 50% claimed that financial constraints prevented them from saving money or paying off debt,” the survey read.
Half of these (45%) earned less than R10,000 a month while the majority (59%) had no tertiary qualification.
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