79% of South African Consumers Say Household Income Negatively Impacted by COVID-19
TransUnion unveils research assessing pandemic’s effect on consumer finances
Almost eight in 10 South Africans (79%) said their household income has been negatively impacted by the COVID-19 pandemic. The newly released research from TransUnion (NYSE: TRU) found that an additional 7% of South African adults said they expect that their household income will suffer in the future.
TransUnion has initiated a survey* of adults (18 years old and over) in South Africa and abroad to better understand the financial impact of COVID-19 on consumers. The initial South African survey (commenced week of April 6) of 2,001 adults marked the first in the country in a planned series of ongoing research. Additional details as well as resources for consumers looking to minimise the potential negative impact of the pandemic on their credit, and access to self-serve educational materials can be found here.
“Whether it’s their health, financial well-being or changes in day-to-day living, the lives of millions of people in South Africa and abroad have been dramatically changed. In times like these it is important that we all come together to address these challenges for the benefit of consumers, businesses, and the economy as a whole,” said Lee Naik, CEO TransUnion Africa. “The aim of our regular consumer research is to better understand the financial impact of the COVID-19 pandemic and better inform consumer, business and government decisions during these unprecedented times. This is a truly global issue that affects us all and we all have an important part to play in its resolution.”
TransUnion’s research found that some generations, particularly Millennials (those born 1980 to 1994) and Gen X (born 1965 to 1979), were more impacted financially by the COVID-19 pandemic than others. While 89% of consumers who have had their household income impacted by COVID-19 are concerned about paying their bills, this increased to 92% for Millennials and 95% for Gen X. On average, respondents said they will be short about R7,000 in the near future. When looking at the timing of any expected shortfall, 45% of all impacted consumers say it will be longer than one month, but less than three months, while 23% expect to feel the impact between two to four weeks from now.
The survey also found that one in ten (10%) of impacted respondents have already lost their job as a result of the COVID-19 pandemic. Some provinces were impacted more than others, with this figure at 12% for the Western Cape, 11% for the North West and 10% from Kwazulu Natal and Gauteng respectively, with the younger generations more acutely affected by job loss.
In response to the financial challenges caused by COVID-19, 29% of South African consumers said they planned to use their savings to pay current bills. A smaller number (22%) said they would borrow money from a friend or family member. Additionally, 27% do not know how they are going to pay their bills or loans and 33% will only pay a partial amount that they can afford.
Two in five (40%) people financially impacted by the pandemic said they had already reached out to companies they have accounts with to discuss payment options.
“Consumers are facing many unexpected challenges and it’s natural that people are concerned about their finances. Our survey showed a large number of households are already under considerable pressure. The government has already announced a number of measures designed to help those struggling the most and it is important that lenders and consumers engage with each other and have constructive conversations around dealing with these extraordinary circumstances. We encourage consumers looking to minimise potential negative impacts of the pandemic on their credit profile to visit TransUnion’s COVID-19 website,” concluded Naik.
TransUnion’s research and credit education tools will be updated weekly on its COVID-19 website as the company continues to support consumers and businesses from around the globe.
* Research methodology – TransUnion works in partnership with third party research provider Qualtrics ® Research-Services. Adults 18 years of age and older residing in South Africa were surveyed using an online research panel method across a combination of computer, mobile, and tablet devices. The survey included quotas to balance responses to the census statistics on the dimensions of age, gender, household income, race, and region.