Young people rapidly take on debt

Once young people start earning they rapidly take on debt with those aged 21 to 30 forming the third biggest section of highly-indebted consumers with 20 percent or a fifth of those in this age group under debt counselling according to the survey sample.

As South Africans begin having families and accumulating homes, their debt burden shoots up and those aged 30 to 40 form the largest sector of heavily indebted people in South Africa at 33 percent of those seen by debt counsellors.

Age does not bring much financial maturity with those aged 41 to 50 forming the second most indebted sector in South Africa with 32 percent of those under debt counselling, but finally by age 51 wisdom starts setting in and debt drops dramatically with 12 percent of those aged 51 to 60 under debt review and three percent of those aged 61 to 70.

47 percent owing less than R3000

The amounts of money owed by consumers are in most instances very low, with 47 percent owing less than R3000; 23 percent paying back under R5000; 21 percent owe creditors less than R10 000; six percent are in debt for less than R15 000 while only two percent owe close to R20 000 and just one percent owe as much as R65 000 or slightly less.

Repayments almost directly correlate to the size of financial institutions and their client base with Standard Bank and Absa receiving the most money back (27 percent each), followed by First National Bank (16 percent), Nedbank (13 percent), Wesbank (12 percent), African bank (four percent) and Capitec (one percent).

Among retailers again, debt tends to represent the size of the retailer in the economy according to its spending cards. Easton Berry which collects repayments for Foschini, Queenspark and Woolworths receives 44 percent of repayments, followed by 23 percent to Edcon (Edgars, Jet), eight percent to Woolworths cards, eight percent for Sanlam loans, six percent to RCS and the remainder to relatively smaller retail groups.

Article continues on page three...