on hire purchase agreements, store cards and other high interest loans.
On the back of already challenging economic conditions before the lockdown, it noted that the pandemic could impact significantly “on the nation’s personal finances in the months, and even years, to come”. According to Stats SA, South Africa’s official unemployment rate stood at 30.1% in June. Post the pandemic, that is expected to rise as high as 50%.The Old Mutual Savings and Investment report also noted: “Not only are absolute income levels under pressure as many take salary cuts, but demands on share of wallet are increasing as never before. A third of consumers find that they are having to support more people financially than they did before the pandemic.
Miller questions why this is the case when it’s common practice to purchase homes, vehicles or even cellphones on a contract, paying these off over time until they’re owned outright. This offers flexibility, she adds, and can be upgraded, downgraded or cancelled at any time. Maintenance and risk cover also protects consumers should items need to be repaired or replaced.