MICRO-SAVINGS: PROVIDING SOME CERTAINTY IN TOUGH TIMES

Every cent counts

- JUSTIN ASHER

ACROSS THE world, people are facing a cost-of-living crisis—and as consumers fork out more for fuel, food, and rent, saving has stopped being a priority for many. But micro-savings and investments provide an opportunity for ordinary people to put something away for the future, in a way that is still affordable and sustainable.

According to a Stanlib report on savings in South Africa, household savings can be tracked in three main phases.

• Between 1960 and 1981, there was a high household savings rate, which averaged at around 10 percent and peaked at 23%.
• From 1981 to 2001, this dropped drastically to about 3.9% of household disposable income.
• Post-2000, these plummeted even further—with households recording high levels of consumption, but negative savings rates.

However, a strange thing happened during the COVID-19 pandemic: South Africa’s savings rates increased, despite interest rates dropping.