Home Financial Stability Financial Stability Is a Major Issue in South Africa

Financial Stability Is a Major Issue in South Africa

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The Member Watch Survey by the Alexander Forbes Indicates that the median pensioner will only have a replacement capacity of 28% of his income at the time they finally retire. The latest credit statistics have shown that 40% of the South African citizens who have an active credit status have an impaired credit history. There are quite a number of research, surveys, and statistics that indicate that there is quite a significant number of South African Citizens who are under pressure financially. Another study indicates employers in the country spend an average of 13 hours every month and in some cases up to 20 hours monthly worrying about their future financially.

The financial problems that concern the country’s citizenry differ according to family circumstances, age, gender, and level of income. The most significant financial problem in all of South Africa is how to make ends meet. These problems have a great impact on how different individuals are able to save part of their income for the future especially when they keep on changing their jobs. The other issue affecting the financial stability of people in South Africa is the huge spending on healthcare. The amount of spending on healthcare has been known to be the major contributing factor to a rise in the cost of healthcare in the country.

The employer’s balance sheet is also affected by their employee’s poor financial well-being. Workers who are experiencing financial stress are known to be frequently absent on their jobs and if present, they don’t concentrate, are engaged to increased cases of frauds and can even be highly susceptible to industrial hazards such as accidents. All these factors lead to poor employee output and performance which boils down to lower profits and a dismal return on investments. According to a report compiled by Alexander Forbes, there is a vested interest by employers in improving their worker’s well-being. This is purely because it makes business sense and not for any altruistic reasons.

Currently, the system of finance separates the two fundamental principles of wealth creation and the management of debt. Other sectors of the financial industry are treated in a system of silos. For instance, the funding of retirement benefits is done separately from healthcare despite the fact that all these issues have an interconnection at some point with each having a significant ripple effect on the other. To solve this problem, employers have tried many variations on programs of dealing with financial wellness for their employees.

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