Nine out of 10 South Africans worried about paying bills as Covid-19 bites

As many as 91% of South Africans are concerned about being able to pay bills and loans four months into the Covid-19 pandemic, according to a TransUnion survey released on Monday.

TransUnion has conducted weekly surveys on how much consumers in SA have been affected by the lockdown.

In the previous surveys, rent and utility payments were the two bills that consumers were most concerned about being able to pay.

“However, this month the top two bills that consumers are most concerned about not being able to pay are retail/clothing accounts and personal loans. With the large majority of payment holidays seeing their end in June, this is no surprise,” said TransUnion.

The online survey was conducted among 1,031 adults in the country between July 1 and 6 by TransUnion in partnership with third-party research provider Qualtrics Research Services.

It found that 21% of consumers surveyed reported that they had payment holiday arrangements with their lenders and service providers, 16% had this arrangement for their personal loans, and 49% of these consumers were not making any payments on these loans at the time.

The amount that consumers feel they will be short in paying bills decreased to a new low of R6,770 - down 5% from the previous survey and down 10% from the survey high of R7,543 recorded in early May, according to the report. 

Many consumers said they had been forced to cut down on unnecessary spending, including cancelling subscriptions, with as many as 64% of impacted consumers cutting back on discretionary spend.

“With the lockdown easing and more spend opportunities opening up, it will be interesting to see how this continues. Cancelling subscriptions and memberships (43%) and cancelling digital services (42%) are next on the list of household budget adjustments that consumers have made as a result of the financial impact of the pandemic.”

Other key takeaways from TransUnion’s "Wave 5" report include:

• With lockdown levels across the country easing from June, fewer consumers have reported being negatively financially impacted by Covid-19. In July, 80% reported negative impact, down 4% compared to last month. 
• Despite this, job losses have increased substantially since the start of the surveys. This month, 17% of impacted consumers reported losing their jobs, compared to 10% in round one. 
• The younger population groups continue to be the hardest hit, with 19% of impacted millennials reporting having lost their jobs (up from 11% in survey one) and 17% of Gen Zs reporting job losses (up from 12% in round one).
• In all previous surveys, rent and utility payments were the two bills that consumers were most concerned about regarding their ability to pay. However, this month, the top two bills that impacted consumers are most concerned about not being able to pay are retail/clothing accounts and personal loans.