Cape Town - The continuous drought, the likelihood of an electricity price hike and the probability of a tax increase early this year is going to squeeze consumers to the maximum, according to Neil Roets of Debt Rescue.
He said the depreciation of the rand will increase the woes of severely strained consumers during the early part of 2016, when the impact will be seen on imported goods.
“Unemployment is at over 25.5% and the matric class of 2015 will add more job seekers to the job market. Add to this the speculation of a few potential interest rate hikes, and the outlook for 2016 is dire,” Roets said on Monday.
National Credit Regulator (NCR) statistics show that just slightly less than 50% of all credit-active consumers are over-indebted, meaning they are in arrears by three months or more on at least one of their accounts. Debt Rescue statistics indicate that there has been a dramatic spike in the number of applications for debt review between 2014 and 2015, with 182% growth year-on-year. More men are applying for debt review than women.
These figures also show what Roets calls a phenomenal increase of 214% in young people between 21 and 25 years of age applying for debt review. In his view, this because the youth are not financially educated on how to deal with debt and tend to overspend - usually on luxuries.