According to Stats SA, April 2025 saw more than 26,000 debt-ridden South Africans being summoned to appear in court. While this is a slight decrease from the first three months of the year, R30.2 million (12%) of the debt against which this action was taken is for rent – a basic necessity.
SA Reserve Bank figures show the outstanding balance of household debt growing at an average annual rate of 5.2% from 2015 to 2022. And, Experian reports that vehicle finance accounts in default rose by 31% from March to June 2024 alone.
Lettesha Pillay, Head of Business Development at advisory firm NMG Benefits, says this financial distress is the norm rather than the exception. Data from DebtBusters supports this: the most vulnerable consumers, taking home R5,000 or less per month, use 76% of their income to repay debt, and those earning R35,000 or more spend 77% servicing debt.
Pillay says that South Africa’s financial stress landscape is different from other countries. “Strained household finances stem from endemic unemployment that often pressures households budgets even if there is one breadwinner. It is compounded by soaring living costs. Multiplied by dealing with medical and other emergencies. And rooted in a lack of basic financial education.”
It thus critical for employers that wish to better support their workforce, to partner with local experts who understand the nuances of our economy and workforce behaviour.
However, Pillay notes that many employers are at a loss on where to start and understandably so. Money brings up a lot of emotions, including fear, guilt, and shame, and NMG case studies show that employees fear judgment and career repercussions if their employers learn the extent of their over-indebtedness. They are unlikely to open up unless they feel safe and protected; confidentiality and trust are crucial. All of which makes one-on-one, anonymised, confidential interaction essential for driving real behaviour change.
As a leading financial advisory expert and employee benefits provider, NMG does not impose untested programmes on the employer groups that it works with. A case in point: they rolled out a financial support solution called SalarySaver in-house, and quantified its success, before adding it to their offering.
“NMG SalarySaver goes far beyond surface-level budgeting advice,” says Pillay. “It tackles the root causes of financial distress with practical support that’s scalable, sustainable, and measurable.” The programme targets the high-impact areas of the “systematic drains” on employees’ salaries:
SalarySaver’s financial professionals help employees consolidate multiple funeral and credit life policies into a single, more affordable and more beneficial policy, often saving hundreds of rands a month. Debt restructuring is a major focus area, and the programme has helped employees move from exploitative short-term loans to affordable credit solutions with a total cost of credit (TCOC) of 15%–19%, resulting in meaningful monthly savings. Wherever possible, SalarySaver steps in when it comes to managing garnishee orders, along with accessing responsible salary advances. For those starting to save, it also includes access to an innovative, flexible retirement annuity, into which employees can direct any savings – even if the amount differs from month to month.
SalarySaver empowers employees to crush debt, optimise insurance, unlock savings, and auto-fund their futures, at no personal cost, while employers get aggregate data to track improvements in workforce wellness.
“On average, we’ve saved 40%-50% on employees’ monthly insurance and debt costs since making SalarySaver available,” says Pillay. “This in turn has helped plug the 23% (average) drainage in employee effectiveness caused by financial stress. By turning take-home pay into long-term wealth, SalarySaver is a true financial transformation model.”
