South African Savers Flee Banks; Regulator Eyes Growing Cash-at-Home Trend

Old Mutual’s 2026 Savings and Investment Monitor has put a precise number to a troubling trend: 64% of working South Africans surveyed now keep at least some savings in cash at home, up from 40% in 2021. That 24-percentage-point rise over five years signals a measurable retreat from formal financial institutions, one that the financial services sector is struggling to reverse.

Thabo Hollo, Senior Programme Manager at Old Mutual, made the stakes plain in an interview with CapeTalk/702. “It’s not holding steady. It’s increasing,” he said, warning that the movement toward unbanked cash shows no sign of stabilizing.

The reasons are layered. Accessibility is the most immediate driver. Savers cite the convenience of money within arm’s reach, free from withdrawal delays or banking friction. Many also question the value of formal products, pointing to low interest returns and fees they believe erode their balances over time. These are not abstract complaints; they reflect a concrete cost-benefit calculation that, for a growing share of the workforce, is resolving against the bank.

The demographic pattern sharpens the concern. South Africans aged 18 to 29 show the strongest tendency to bypass banks and investment vehicles entirely. This group carries competing financial obligations, to parents, children, and other family members, that demand ready liquidity. Hollo acknowledged the logic: unbanked savings let younger workers respond to family needs without navigating institutional delays. The problem is the long-term cost of that convenience.

The 18-to-29 cohort is precisely the window in which compound savings growth takes hold. Regular withdrawals, however understandable, cut that process short. “I worry a lot that this is an age group that should be saving more than withdrawing,” Hollo said.

By contrast, the formal savings industry has not stood still. Many providers have redesigned products to include immediate or short-notice access, directly targeting the accessibility argument that drives cash hoarding. These products also offer returns that outpace money sitting at home, where inflation quietly reduces purchasing power year on year.

Hollo’s prescription for individual savers is behavioral, not just structural. He argues that treating savings as a residual, something funded with whatever is left after spending, reliably produces minimal accumulation. His recommended sequence inverts that habit: “Spend after your savings. Don’t save after you spend.” Automating contributions, he added, removes the moment-to-moment temptation to redirect funds toward immediate consumption.

The broader question the data leaves open is whether product redesign is sufficient on its own. The persistence and continued growth of cash-at-home practices suggest that fee structures, return rates, and institutional trust are all in play. Whether formal financial institutions can close that gap before the 18-to-29 cohort cements its savings habits will shape South Africa’s household wealth picture for decades.