SIKI MGABADELI: From the BETI indicating low levels of consumer confidence to the 2017 Sanlam Benchmark Survey, which has found that seven out of ten middle-class workers experience some form of financial stress. The annual retirement funding study, which has now delved into the financial wellness of employees in the workplace, shows that financial stress has reached dangerous levels in South Africa. It has become pervasive both at the workplace and in the home.
Let’s chat to the CEO for Sanlam Employee Benefits, Client Solutions. That’s Viresh Maharaj. Viresh, thanks so much for your time today. “Dangerous levels” – what does that mean?
VIRESH MAHARAJ: Thank you for the opportunity. This year’s…research found that approximately 73% of the 1300 professional middle-income earners that we interviewed indicated that they experience some form of financial stress. I do want to emphasise that this is a professional group. More than 80% earn more than R200 000 per year and 60% earn more than R300 000. Of these 90% have some form of tertiary education… The spine of our economy is stressed… [line breaks up]
SIKI MGABADELI: [Recapping] Viresh, you have explained that the people that you survey are really kind of the spine of South Africa, our backbone in the middle class. They are employed but they are under financial stress. How do you define financial stress?
VIRESH MAHARAJ: Thanks, Siki. We define financial stress as the negative emotions associated with the difficulty that an individual or household may feel or face when trying to meet financial commitments due to a shortage or misuse of their money. So the emotions that go along when dealing with their financial situations, effectively. When we asked them where they felt the stress – to try and figure out how pervasive it is – we found that it’s felt everywhere.
About 40% say that they feel it at work, close on 80% say they feel it at home. And about 40% even say that they feel it while they are trying to relax in their leisure time. Most of them who responded in this way indicated that it’s having some form of negative impact on their life or the ability to perform at the office.
SIKI MGABADELI: Wow. So what do we need to do about this? There seems to me to be a lot of financial education taking place at the moment, whether from media or from the providers themselves. Where are the gaps, then?
VIRESH MAHARAJ: Siki, I think the gap starts with the individual. The way I like to speak about education is to use an example. Now, for many of your listeners, if I ask a question, how many of you know that you need to exercise say, five times a week for at least 30 minutes a day, most people would say, yes, yes, we know that. And if I had to ask well, how many people actually do, a lot fewer would put their hands up.
Now the answer there is not education, because people know. The difference is that you care enough to make a difference, you care enough to put that one foot in front of the other. Whether it’s at four-thirty or five in the morning or late in the evening you care enough to make an effort.
SIKI MGABADELI: Unfortunately, Viresh, we are out of time. We’ll have to leave it there. But this is a conversation we need to continue to have, because it is concerning when you find more and more people in financial distress. Viresh Maharaj is with Sanlam Employee Benefits.
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https://www.moneyweb.co.za/moneyweb-radio/middle-class-under-dangerous-financial-strain/
