YOUNG SOUTH AFRICANS CAUGHT BETWEEN SAVINGS ASPIRATIONS AND ECONOMIC REALITY
Only 46% of working Gen Z South Africans saved regularly in 2026, down 11 percentage points from the year before. That single figure, drawn from Old Mutual’s Savings and Investment Monitor released ahead of national savings month, captures a widening gap between financial intention and financial capacity among the country’s youngest workers.
The deterioration is broad-based. More than half of young savers (56%) withdrew money from savings accounts to cover daily expenses, a 10 percentage point increase year-over-year. Financial stress among this cohort climbed to 36% from 29% in 2025, and 22% took on loans specifically to fund everyday spending. These are not the numbers of a generation indifferent to saving. They are the numbers of one being squeezed.
John Manyike, group head of financial education at Old Mutual, put it plainly. “Generation Z is often seen as financially impulsive, but our research reveals a more complex picture. Young South Africans understand why saving and planning matter. However, ongoing economic pressure is leading many to prioritise today’s needs over tomorrow’s goals.”
Income growth has stalled at precisely the wrong moment. The share of young people earning more than they did a year earlier fell to 51% in 2026 from 55% in 2025. Meanwhile, nearly 43% of Gen Z respondents belong to what the researchers call the “sandwich generation,” simultaneously supporting younger and older family members. That dual obligation competes directly with personal savings goals, even as emergency funds rank among their top five financial priorities.
The pressure is not confined to younger workers. South African consumers broadly have shifted toward short-term financial priorities as living costs have risen. The national saving rate edged up to 14.9% of GDP in the first quarter of 2026 from 13.3% in the fourth quarter of 2025, according to the South African Reserve Bank’s quarterly bulletin, though analysts expect that figure to retreat in the second quarter as cost-of-living pressures intensify.
Frikkie van Loggerenberg, CEO of Ifsa Asset Managers, identified a deeper structural problem. “For South Africans in general, there is a bit of a lack of a savings culture. Everybody tries, but there’s not that 100% commitment to get to that point, and there’s not enough focus or commitment to retirement planning,” he told Business Day. “On the other hand, there is this economic pressure where things are getting more and more expensive each day, and people are battling. The income is battling to keep abreast with inflation.”
Van Loggerenberg has been a vocal critic of the two-pot retirement system, introduced in September 2024, which permits policyholders limited access to retirement savings for emergencies. Government and system proponents argue it has prevented workers in financial distress from resigning solely to unlock their full retirement benefits, while keeping the core retirement pot intact until retirement age. By end-February 2026, the South African Revenue Service had approved R79.3 billion for withdrawal from savings pots, with 5.6 million people applying for tax directives.
That scale of drawdown concerns critics. Van Loggerenberg warned that access to savings pots creates a behavioral pattern of annual withdrawals that steadily erodes retirement capital. He pointed to data from 10X Investments’ 2023/24 retirement reality report showing only about 6% of South Africans are on track to retire comfortably. “The rest have to keep on working, or they rely on their children to take care of them. So then that legacy just keeps kicking the can forward, and I would like to see South Africa break that cycle,” he said.
The Old Mutual monitor, due in full later this month, frames the challenge as structural rather than attitudinal. Young workers hold genuine savings goals and understand the value of financial planning. What they lack is the income headroom to act on either. Until real income growth recovers or cost pressures ease, the question is not whether the aspiration exists, but how long it can survive the arithmetic working against it.