What if employers and the financial services industry could help?
South Africans are notoriously bad savers. Our household savings ratio has been negative for most of the past 10 years, meaning that we are borrowing more than we put away.
This is a significant problem for the country, as our gross domestic savings rate is below the levels needed to support sustainable economic growth. It is also a risk to individuals and families, as most of the population has no financial safety net.
“All of our middle class, and even many in the upper class, are one unfortunate incident away from poverty,” independent actuary Rob Rusconi told the Alexander Forbes Hot Topics Summit in Cape Town on Wednesday. “In other words they are cutting it very fine. They have enormous potential to fail.”
Proceed to Source : MoneyWeb
YOUNG people in South Africa are better at saving than previous generations, but they aren’t investing, a study by Old Mutual has revealed.
Young people, or Millennials — those typically aged between the ages 18 and 34 — were failing to invest for the long term, according to research by Old Mutual Unit Trusts.
The study looked at the financial behaviour of employed Millennials and found that, while seven out of 10 Millennials have a savings account, only four in 10 are investing in pension or provident funds. With life expectancy now at 114 years, according to research by Britannica, the failure to invest could potentially be catastrophic for young people in future.
Proceed to Source : News24
Almost 1 in 3 millennials say they prefer cash instruments for long-term investments—but the generation is least likely to earn interest on such savings.
Millennials think cash is the best long-term investment. Unsurprisingly, they’re not seeing good returns.
Almost 1 in 3 millennials said cash instruments, such as savings accounts and certificates of deposit, are the best place to invest money they won’t need for the next 10 years. That compares with only 21 percent of older generations—most of whom prefer the stock market—according to research released on Wednesday.
Proceed to Source : Bloomberg
On paper, all retirement planning is perfect. You punch in a couple of numbers into a computer, make some assumptions on contributions, time period and growth on your investments and voila!, the answer comes back in an instant: you are on track or if you are not, the computer programme will tell you how to fix it by making additional investments or working longer.
All retirement planning programmes that I have ever done or seen, assumes an inflation-beating rate of return, depending on how bullish you might have felt about the future performance of your particular investment strategy. Most assume inflation plus 3, 4 or 5% in making these calculations.
Proceed to Source – MoneyWeb
As living expenses such as food and fuel rise, so has the proportion of income we spend on these consumables, putting the squeeze on our ability to save and service debt, a survey reveals.
Savings as a percentage of household spending have been declining since 2013, when they represented on average 20% of household spend compared with 14% this past year.
The latest Old Mutual Savings and Investment Monitor results, released this week, reveal that households are spending 67% of their household income on living expenses compared with 62% the previous year.
Fourteen percent is being saved, 13% is spent on servicing debt and 6% goes towards insurance and medical schemes.
Savings (pension funds, education policies, and so on), as well as insurance and medical scheme costs, have been cut back by a percentage point each, while debt servicing has to 13% of income from 16% last year.
Proceed to Source : Business Live
National Savings Month is in July each year and we are proud of our efforts to support the national drive to strengthen South Africa’s savings culture. The improvement of savings in our country is one of the major social-economic challenges facing us as a society. As a market leader, Old Mutual remains committed to provide expert financial advice and innovative solutions to our customers. In times of economic uncertainty, it’s important for people to seek trustworthy guidance, and to be equipped with the appropriate advice and tools to help them realise their goals and dreams.
Proceed to the Old Mutual Savings and Investment Monitor 2018
Old Mutual has released its 2018 Savings & Investment Monitor, focusing on the finance habits of every day South Africans.
The report is based on more than 1,000 face to face interviews, from 26 April – 26 May 2018, which were weighted to be representative of the South African working metro population.
Proceed to Source : BusinessTech