South African women in financial 'survival mode', survey shows

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  • An online survey of SA women by Sanlam has found that 72% consider themselves to be living in "survival mode".
  • According to the survey, 86% of South African women ranked financial worries as the top reason for their sleepless nights.
  • The study also found that six in 10 women's income was reduced due to the coronavirus pandemic.


An online survey of South African women conducted by Sanlam has found that 72% consider themselves to be living in "survival mode".

The survey showed that 86.4% of South African women ranked financial worries as the top reason for their sleepless nights, with health coming in at a close second at 65.4%. They find it challenging to focus on the long-term, particularly financial planning, due to having to focus on daily needs.

The study also found that six in 10 women's income has reduced due to the coronavirus pandemic, while four in 10 women have already adopted money conscious behaviours in response to the reduction in their income. Five in 10 women were spending relatively more on food and other expenses than before lockdown.

Kenosi Magosha, head: client solutions savings at Sanlam, says, for anyone who has reduced income, taking a "bottom up" approach to budgeting that looks at spending priorities is critical.

"Zero-based budgeting is a way of budgeting where you start from zero, rather than tweaking an existing budget when reviewing spending priorities. One needs to ask, 'what should I spend on that can enable me to make progress and enable financial resilience?'"

South Africa's GDP is expected to contract by a record 8.2% this year due to the economic impact of the Covid-19 pandemic and the resultant lockdowns. 

Retirement

Shaeera Essop, strategic client engagement manager at Momentum Corporate, says research into their client base revealed that out of all the women members in their retirement fund FundsAtWork, 88% are in the danger zone with an average retirement replacement ratio of 21%.

"This means almost all women members would receive around only 20% of their current salary in retirement. When we start to look at things like longevity – and that women generally outlive men – the risk of female employees one day outlasting their money is a reality," says Essop.


Financial stress as a result of this has been shown to have significant impacts on employee productivity and 14% of women's disability claims related to mental health.

"The worst part is that this statistic is almost three times greater than psychiatric claims made by men. It's abundantly clear that too many women are feeling stressed to the point where they can no longer perform their job and are put on permanent or long-term disability," says Essop.

Momentum Corporate's income replacement claim statistics indicate that most claims by women occurred between the ages of 40 and 49 and related to mental illnesses such as major depression and anxiety.

Research by FNB shows that women's liquidity and retirement savings are often affected by career interruptions due to childbirth, maternity, high rates of single mothers taking on most, if not all the expenses of raising children and running households.

Creating a savings and investment culture among South African women will, therefore, not only help in building financial security, but will go a long way in increasing the household savings ratio within the country.

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