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Fostering a strong savings culture in South Africa

Last Updated Jul 2013

Financial literacy is an important building block for a sustainable economy, saysSAICA

Johannesburg, Monday, 15 July 2013 – The latest statistics released by the South African Savings Institute (SASI) show that household savings in South Africa is a meagre 1,7% whilst household debt is sitting at a staggering 75.4%. 

Yusuf Dukander, project director of Financial Services at the South African Institute of Chartered Accountants (SAICA) says that the household savings percentage is way below the accepted norm for a developing economy, adding that only about 10 per cent of the current working class will save enough for their retirement to maintain their pre-retirement lifestyle and consumption. 

Dukander observes a low preservation trend among employees, who usually tap into their pension fund contributions when they change employment, resulting in a deficit in future earnings. “Savings, is not rocket science, but rather behavioural management to better manage one’s finances and for households to save a certain percentage of their monthly disposable income.”

Dukander explains that South Africa is not unique to a low savings culture but that it does host different economic and social dynamics to other economies.  He emphasised that savings was not a privilege for the select few, but rather a necessity for many.  “There is also a big need for products tailored to the low-income earners in order to harness and foster a savings culture.” 

“Whilst we acknowledge that the effects of the global economic aftermath played a contributing factor in terms of how much households are actually saving in real terms, there is a lot of expenditure on peripheral items, such as extravagant cars and gadgets – this particular spending can be structured into a short-term savings vehicle which would provide reasonable yields,” advises Dukander.

Since the inception of SASI over a decade ago, South Africans, find themselves challenged at saving. According to media reports, Finance Minister Pravin Gordhan noted that “an entrenched savings culture means South Africans must develop an attitude of saving for major expenses and goals, instead of relying on easy credit and long repayments to purchase whatever luxury good seems desirable at the time. Consumers need to go beyond what we term ‘necessities’ in terms of the role of savings. This means that we need to change our mind sets about savings and financial health in general.”

Reiterating the Minister’s views, Dukander states that, adopting a strong savings culture begins at home, at schools and organisations. “As parents, teachers and employers, we have a moral obligation to serve as ambassadors for our youth, the leaders of tomorrow. We can play a vital role in teaching our youth the importance of responsible saving – many youth have this myth that saving is only for the elderly.     The consequence is quite simple to grasp; if you only entered into a savings vehicle from the age of 30, you have lost out on 10 years of capital growth which could have a significant impact on how and when you retire.” 

The 2012 budget speech outlined government’s strategy to introduce tax-exempt short and medium term savings products to encourage more consumers to manage their levels of debt and develop a strong saving culture.

Savings is a long-term project and one has to have a strategy and framework in place. The financial planning industry has been plagued by dodgy planners but the regulatory authorities have made great strides in professionalising the industry and running campaigns on consumer protection.  In 2012, the National Treasury also released a number of discussion documents; all in an effort to improve South Africa’s savings ratio. 

Financial literacy is an important building block for a sustainable economy. Dukander advises people who would like to start saving to follow these five steps:

  • It is never too late to start saving
  • Take advantage of allowable tax deductions for pensions and retirement savings
  • When changing jobs, it is not recommended that you cash in your retirements savings
  • Make sure you do a budget each month and track your household consumption
  • Monitor and manage your credit card, loans and bills closely – don’t over extend your exposure and limits

“I would like to appeal to all South Africans to take advantage of the national savings month and take that important step of ensuring that you and your family are financially equipped for the future” concludes Dukander


Bontle Tsikwe
Communications Coordinator: Corporate
SAICA Communications & Marketing Division
Tel: 011 621 6712

Nkolola Halwindi
Project Director: Communication
SAICA Communications & Marketing Division
Tel: 011 621 6713


The South African Institute of Chartered Accountants (SAICA), South Africa’s pre-eminent accountancy body, is widely recognised as one of the world’s leading accounting institutes. The Institute provides a wide range of support services to more than 35 000 members who are Chartered Accountants and hold positions as CEOs, MDs, board directors, business owners, chief financial officers, auditors and leaders in their spheres of business operation. Most of these members operate in commerce and industry, and play a significant role in the nation’s highly dynamic business sector and economic development.

SAICA serves the interests not only of the Chartered Accountancy profession, but also of society in general through its key objective of upholding professional standards and integrity. The pre-eminence of South African Chartered Accountants [CAs(SA)] nationally and internationally attests to the successes achieved by SAICA on a broad global canvas. SAICA’s members enjoy the privilege of using the highly regarded and prestigious CA(SA) designation. Members of SAICA are subjected to a Code of Professional Conduct, which provides guidelines for ethical and professional behaviour. Fundamental ethical principles to which CAs(SA) are expected to achieve include:

  • Integrity;
  • Objectivity;
  • Professional Competence and Due Care;
  • Confidentiality; and
  • Professional Behaviour.

SAICA members serve on international accounting bodies including; the Trustees of the International Financial Reporting (IFRS) Foundation, the International Accounting Standards Board (IASB), the IFRS Interpretations Committee, the IFRS Advisory Council and the Council of the International Federation of Accountants (IFAC). SAICA is also a member of The Global Accounting Alliance (GAA). 

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