Poor saving habits plague young South Africans
Millennials are in danger of making worse mistakes than their parents did‚ when it comes to investments and planning for retirement.
A recent survey by 10x Investment revealed the gloomy reality about savings habits of young South Africans.
The survey‚ of 2‚200 respondents aged 25 and over‚ aimed to gain insight into the financial behaviour of young South Africans‚ specifically targeting the country's economically active population.
Millennials in the research have been categorised as individuals between the ages of 25 and 35.
The research showed that millennials are not saving enough and are worse at saving compared to their parents with only 35% of millennials investing for the long term.
10x CEO Steven Nathan said that with only 6% of South Africans able to retire comfortably‚ retirement remains a crisis in South Africa.
“Young people are not saving enough and that hasn’t changed in the last 25 years. Younger people would rather have a bigger take home salary than a higher contribution into their savings or retirement funds‚” Nathan said.
The research also showed that when compared to their parents‚ millenials are saving more towards educating their children and leaving an inheritance to their children.
The research showed that only 44% of millennials trust the retirement investment industry and 57% of the group want to retire before the age of 65.
Millennials in the digital age are looking for information regarding financial investments online.
“Millennial are less reliant on financial advisers as their parents were and turn to the internet for independent information on how to invest their money and plan for their futures‚” said Nathan.
Nathan also highlighted the importance of not cashing out pension and provident funds when changing jobs‚ saying it was risky and damaging to one’s retirement stability.
“Individuals need to take charge of their own lives and their retirement because nobody cares about your money more than you do‚” said 10x head of retail Emma Heap.
Nathan also said it was important for an individual to know how much fees they are paying to service providers because that has an effect on their long-term investment returns.