More people are sinking deeper into a debt crisis as many spend close to half of their monthly income to keep afloat with debt repayments.
This is according to the DebtBusters Money-Stress Tracker, which measures how financial stress affects other parts of people’s lives, including their home life, work performance and physical health.
The report, released on Tuesday, revealed that more than 53% of respondents spend over 40% of their income on debt repayments. This growing repayment burden has further increased financial anxiety as respondents also reported feeling stuck and unable to improve their financial position.
Benay Sager, DebtBusters executive head, said the findings showed that more people were spending dangerously high portions of their income on servicing debt.
Cost-of-living crisis
He said this reflected the emergence of a cost-of-living crisis. Sager said that while high interest rates had been the biggest financial concern over the past two years, rising inflation and higher electricity costs had once again become the main source of financial pressure.
“What we have seen is a particular uptick in terms of younger and lower income, and, generally, the two are related. As we start our working careers, our income levels are lower, so the two are somehow interlinked.
“Our youngest generation is the most financially anxious, and we are now talking about people younger than 25. We saw a significant increase in terms of what they’re feeling, and of course, jobs would be contributing to this, you know, entering adulthood. What they are feeling with regard to the impact or potential impact of AI on future careers would have definitely an impact on all of these things,” said Sager.
The report found that these concerns were most deeply felt by younger people and lower-income households, many of whom are already struggling to make ends meet before the latest increase in living costs.
The South African Reserve Bank (SARB) increased the repo rate by 25 basis points to 7% in May, and this increase brought the prime lending rate to 10.5%. This was to contain the escalating inflation risks amid escalating fuel and electricity costs as the Middle East war persists.
Long-term psychological burden
“The dominant source of anxiety has shifted each year: inflation in 2022, interest rates in 2023, debt levels in 2024, a brief stabilisation in 2025, and the cost of living in 2026. What has remained constant is that short-term financial survival crowds out longer-term planning for a large majority of South Africans.
“Another consistent finding offers both a challenge and an opportunity. Over 80% of people with unsustainable debt levels do not seek professional help. Five years of data confirm that this is not primarily a knowledge gap – awareness of debt counselling is relatively high. It is a trust and agency gap. Reducing it will require sustained investment in accessible, stigma-free financial support,” reads the report.
According to the report, financial pressure has shifted from being a temporary problem to becoming a long-term psychological burden for many South Africans.
Sager warned that the biggest risk was no longer only financial hardship but that people were beginning to accept constant financial stress as a normal part of everyday life, highlighting the deep human cost of the country’s worsening debt crisis.
ALSO READ: Debt crisis overwhelms high-earners, older people most affected
- Over 53% of respondents spend more than 40% of their income on debt repayments, fueling financial anxiety and feelings of being trapped.
- The rising debt burden reflects a broader cost-of-living crisis driven by inflation, higher electricity costs, and previous high interest rates.
- Younger people under 25 and lower-income households are most affected, with concerns about job security and the impact of AI on future careers contributing to anxiety.
- The South African Reserve Bank raised interest rates to combat inflation, increasing financial pressure on borrowers.
- Despite high awareness of debt counselling, over 80% of people with unsustainable debt do not seek help, indicating a trust gap and the normalization of chronic financial stress as a major psychological burden.
More people are sinking deeper into a debt crisis as many spend close to half of their monthly income to keep afloat with debt repayments.
Benay Sager, DebtBusters executive head, said the findings showed that more people were spending dangerously high portions of their income on servicing debt.
He said this reflected the emergence of a cost-of-living crisis. Sager said that while high interest rates had been the biggest financial concern over the past two years, rising inflation and higher electricity costs had once again become the main source of financial pressure.
"What we have seen is a particular uptick in terms of younger and lower income, and, generally, the two are related. As we start our working careers, our income levels are lower, so the two are somehow interlinked.
"Our youngest generation is the most financially anxious, and we are now talking about people younger than 25. We saw a significant increase in terms of what they're feeling, and of course, jobs would be contributing to this, you know, entering adulthood. What they are feeling with regard to the impact or potential impact of AI on future careers would have definitely an impact on all of these things," said Sager.
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Sager warned that the biggest risk was no longer only financial hardship but that people were beginning to accept constant financial stress as a normal part of everyday life, highlighting the deep human cost of the country's worsening debt crisis.
ALSO READ: Debt crisis overwhelms high-earners, older people most affected
