BUSINESS NEWS - South Africa’s top earners are facing significant debt pressure, with those taking home more than R50,000 a month now needing 103% of their income to meet debt repayments.

According to DebtBusters’ Q2 2026 Debt Index, the total debt-to-annual-net-income ratio for this group has reached 307%.

Much of the increase is driven by unsecured debt, which is 84% higher than in 2021, significantly exceeding cumulative inflation of 29%.

By comparison, total debt among lower-income earners has declined by up to 23%. However, DebtBusters says this reflects reduced access to credit rather than an improvement in financial wellbeing.

Across all debt counselling applicants, the portion of take-home pay needed to service debt is now 64%, down from a peak of 73% in the first quarter of 2021, but still at an elevated level.

Larger loans concentrated among fewer consumers

According to Benay Sager, executive head of DebtBusters, lending trends over the past decade indicate that credit risk is increasingly concentrated among a smaller group of consumers.

“Over the past decade the average unsecured loan size has increased, while the volume has decreased. This means larger unsecured loans are being granted to fewer consumers, concentrating credit risk within an ever-smaller group,” said Sager.

Rising living costs add to financial pressure

While income growth has broadly kept pace with consumer price inflation since 2021, several essential household costs have risen much faster.

Petrol prices have increased by 52% since 2021, while electricity tariffs have risen by 101%.

Consumers earning between R10,000 and R20,000 a month are particularly vulnerable, with almost a third of their disposable income spent on food. This leaves less money available for insurance, savings and unexpected expenses.

Payday loans reach record levels

The growing use of personal and short-term loans highlights the cash flow pressure facing consumers.

Nearly all new debt counselling applicants now have a personal loan, while the proportion with a one-month or payday loan has reached a record 63%.

Multi-lender borrowing is also at its highest level since the Debt Index was launched in 2016, with more consumers holding multiple credit agreements.

Younger and older consumers under greatest stress

The Q2 2026 Debt Index also reflects findings from DebtBusters’ fifth annual Money-Stress Tracker, which examines how South Africans experience financial stress.

Both reports indicate that financial stress is increasingly concentrated among people at the beginning or end of their careers.

Younger consumers and those approaching retirement are experiencing some of the highest levels of financial pressure.

Debt counselling offers a way forward

There are signs that more consumers are taking steps to manage their debt.

Sager said that in the second quarter of 2026, roughly 14 times more consumers successfully completed debt counselling than during the same period in 2016.

Consumers under debt counselling paid R570 million to creditors during the quarter, demonstrating the potential economic impact of structured debt management.

“In Q2 2026, roughly 14 times more consumers successfully completed debt counselling than in the same quarter in 2016,” said Sager.

“That’s a powerful indication of what debt counselling can achieve for individuals and the country.”

Interest in online debt management tools is also growing, with non-debt-counselling subscriptions steadily increasing. Younger consumers are driving much of this growth, suggesting an increasing demand for accessible tools to help manage personal debt.

‘We bring you the latest Garden Route, Hessequa, Karoo news’