South Africa’s higher earners group is facing severe financial strain as debt servicing has reached unsustainable levels.
These findings are contained in DebtBusters’ Q4 2025 Debt Index released on Wednesday, which marks the 10th anniversary of the report.
Consumers earning more than R35, 000 a month were using 85% of their income to repay debt. And they recorded a debt-to-income ratio of 210%, the highest on record.
Unsecured debt among this group is now 75% higher than in 2016. It’s far exceeding both inflation and income growth.
Unsecured debt exceeding inflation
Unsecured debt among this group is now 75% higher than in 2016, exceeding both inflation and income growth. On average, 71% of take-home income is used to service debt by consumers seeking debt counselling.
The index shows that while some economic conditions improved during 2025, the long-term impact of rising costs has left consumers with little room to recover. Some of the factors that contributed to improved confidence going into 2026 include the multiple inflation rate cuts. This resulted in a combined reduction of 150 basis points since late 2024.
However, these improvements have not been enough to offset the sharp rise in household expenses over the past 10 years. Electricity tariffs increased by 165%, and petrol prices rose by 74%. The compounded effect of inflation reached 49%. Income growth lagged far behind these increases, steadily eroding consumers’ purchasing power.
Benay Sager, executive head of DebtBusters, said the pressure is clearly visible in debt counselling data.
Dependence on unsecured credit
The index shows record dependence on unsecured credit. A record 96% of consumers who applied for debt counselling in the fourth quarter of 2025 had a personal loan. While 59% had a one-month payday loan, also a record.
Compared with consumers who applied for debt counselling in 2016, those in Q4 2025 were considered worse. The nominal net income increased by about 2% over the decade. However, the compounded rise in inflation means consumers now have 47% less purchasing power than they did 10 years ago.
“Although the average interest rate for unsecured debt is somewhat lower, at 21.9%, it remains stubbornly high. Debt counselling is the best way to restructure this debt, reducing unsecured rates to -2.6% per annum. Also negotiating vehicle debt to more manageable levels.
“The benefits are considerable. Not just for the people who completed debt counselling – a cohort that’s almost 12 times larger than in 2016. In 2025, our clients repaid R5.3-billion to creditors, allowing this money to flow back into the economy.”
Financial stress is also shifting towards older consumers. The average age of new debt counselling applicants has risen to 40. While the share of applicants aged 45 and older increased from 20% in 2016 to 31% in 2025.
He said more consumers are actively seeking help. Subscriptions to online debt management tools rose by 41% compared with Q4 2024.
