It’s official – interest rates are no longer the biggest financial concern for many South African households. That honour now goes to the increasing cost of living, with a lot of people struggling just to get through the month.
This shift is the central finding of DebtBusters’ fifth annual Money Stress Tracker, which found that the cost of living has overtaken interest rates as the biggest source of financial stress for SA residents. Concerns about inflation rose by 28% over the past year, while worries about electricity costs almost doubled, increasing by 99%.
Tomorrow, the Monetary Policy Committee (MPC) will announce its decision about whether to hike, cut, or pause lending rates, and economists divided over whether the South African Reserve Bank (SARB) will hold or raise interest rates.
Bianca Botes, Citadel Global MD, believes the resilience of the rand, improving fiscal metrics and continued structural reforms support leaving rates unchanged. “South African Reserve Bank Governor Lesetja Kganyago’s hawkish stance keeps further tightening possible if inflationary pressure persists,” she said.
Mike van der Westhuizen, CAM Asset Management portfolio manager, said lower oil prices and a stronger rand had helped ease inflationary pressures, although geopolitical tensions continued to pose a risk. He believes there is roughly a two-thirds chance that Governor Lesetja Kganyago will either announce a rate hike or adopt a more hawkish stance.
Chief executive of Future Forex, Harry Scherzer, said the MPC faced a finely balanced decision, with economists divided over whether to raise interest rates again or leave them unchanged. South Africa’s prime lending rate currently stands at 10.5%.
Whatever decision the MPC makes, the data from DebtBusters reveals that consumers are worried about more than just interest rates.
DebtBusters executive head, Benay Sager, said “Interest rates are no longer consumers’ primary concern. The rising cost of living has taken over. The dominant source of anxiety has shifted each year: inflation in 2022, interest rates in 2023, debt levels in 2024, a brief stabilisation in 2025, and the cost of living in 2026. What has remained constant is that short-term financial survival crowds out longer-term planning for a large majority of South Africans”.
72% of respondents said they were experiencing financial stress, while 42% said financial pressures were affecting life at home. This is the highest level recorded since the survey began five years ago.
While borrowing costs remain elevated, more and more consumers are grappling with with a combination of rising food prices, electricity tariffs, transport costs and municipal charges, with their household budgets already stretched almost beyond capacity. One of the main stressors is the cost of electricity, which continues to increase.
Over 50% of the 18 000 survey respondents said that more than 40% of their income paying off debt. This leaves little room to absorb unexpected expenses or rising prices without cutting back elsewhere. The National Debt Counselling Association said many consumers are left with little or no disposable income after covering debt repayments and essential household expenses, making them increasingly vulnerable to even small increases in the cost of living.
These growing concerns are also taking an emotional toll on South Africans, with Clinical psychologist, Andrea du Plessis, saying, “Financial stress is no longer an occasional challenge – it has become a constant psychological state. When we bring it into the home that is supposed to be our sanctuary, our safe space, then we don’t have any space anywhere that we feel safe”.
The findings suggest that consumers who are not yet under debt review are becoming more willing to seek help before their financial situation worsens. DebtBusters found that the proportion of respondents who said they would consider debt counselling rose from 36% last year to 40% this year.
The increase reflects what debt counsellors have been seeing, with more consumers seeking assistance not because of a single financial setback, but after years of rising living costs gradually eroded their disposable income.
So, yes, when people refer to the increased cost of living as a crisis, they are not exaggerating.
Published by: Helen Wallace 2oceansvibe.