Savings Rate 2025, why so many Working Individuals are Struggling to save.
- Albert Johnson
- Jan 12
- 3 min read
Understanding how much working South Africans are saving is critically important for planning financial stability, retirement, and emergency readiness. Despite the importance of saving, recent data reveals a concerning trend: South Africans are saving much less than what financial experts recommend.
In this blog we explore the latest savings rate in South Africa, what it means
for working individuals, and what you can do to build stronger financial habits.
What Is the Savings Rate?
The savings rate measures how much income households set aside rather than spend. A high savings rate typically indicates financial discipline and resilience. Conversely, a low or negative savings rate signals that households are spending more than they earn, often relying on credit or dipping into limited savings.
South Africa’s Current Savings Rate (2025)
According to the most recent official data:
South Africa’s household savings rate was -1.20% of disposable income in the first quarter of 2025, meaning households on average spent more than they earned. This trend reflects weak financial buffers and reliance on borrowing or using past savings.
The long-term historical average savings rate for South African households is approximately 2.37%, showing how recent performance is significantly below historical norms.
When considering all sectors (government, households, and businesses), South Africa’s gross savings rate sits at around 13.7% of GDP — healthier overall but not reflective of individual saving behavior
Metric | Latest Figure / Description | Source |
Household saving rate (Q1 2025) | -1.20% of disposable income | |
Long-term personal savings average | ~2.37% (historical) | |
Gross savings rate (all sectors) | ~13.7% of GDP | (FAnews) |
Workers with no savings (deskless workers) | ~50% | |
Urban working households with no retirement savings | ~40% | (IOL) |
.
The Reality for Working South Africans
While macro indicators provide context, the day-to-day reality for many workers paints a challenging picture:
1. Many Working Individuals Have No Savings
Studies show that roughly 50% of low-income workers — particularly those in retail, security, and informal jobs — do not have any savings at all.
2. Retirement Savings Are Insufficient
Analysis indicates that around 40% of urban working households have no formal retirement savings, making long-term financial security a serious concern.
Why Savings Matter for Financial Security
Savings are the foundation of financial resilience. Without enough savings:
Individuals cannot cover emergencies (e.g., medical costs, job loss)
Retirement planning becomes extremely difficult
Dependence on credit increases, leading to high interest payments
Financial stress rises, affecting quality of life.
Steps to Improve Your Personal Savings
If you’re reading this as a working professional in South Africa and want to strengthen your financial position, here are practical steps:
1. Track Your Monthly Cash Flow
Know what you earn versus what you spend. This is the foundation of budgeting. And at a point of departure, where we conventionally 'start' when we engage with a new client, explaining the importance and principles of budgeting. Here is a budget template for you to use for free. Click here
2. Build an Emergency Fund
Aim to save at least 3–6 months of living expenses in an accessible account. Now you dont have to reinvent the wheel here, and what I mean is to go and scour the web for an investment to do this. This is achieved by using a Collective Investment (but using an income fund), or using a savings pocket or even your mortgage if you have an access bond. (obviously this does not take other things into consideration, so please seek professional advice first).
3. Automate Your Savings
Set up automated transfers into savings or investment accounts every payday. Or if you have discipline to do it, do it and make it a habit. A Good habit that your 'future self' will be proud of.
4. Contribute to Retirement Funds
Maximise contributions to retirement annuities or employer pension/provident funds. There are various benefits attached to using RA's and other retirement vehicles to achieve fantastic returns. Speak to your financial planner for assistance.
5. Reduce Unnecessary Debt
Prioritise paying down high-interest debt to free up more money for savings.
Conclusion
South Africa’s savings landscape in 2025 reveals that many working individuals are not saving enough, or at all. With a negative household savings rate, coupled with low participation in formal savings and retirement plans, financial vulnerability is a real challenge.
However, this doesn’t have to be your reality. With structured budgeting, disciplined saving strategies, and proactive retirement planning, you can build financial resilience and set yourself up for long-term success.
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