Recently published data shows that 2023 was a rough financial year for South African households, and the main factor that impacted the change in income for many South Africans was job losses – among other things.

This is according to the latest TransUnion Consumer Pulse Survey for the fourth quarter of 2023, which highlighted 10 notable factors that impacted household income in South Africa by the end of the year.

According to the report, over the past quarter, households reported diverse income trends. Specifically, while 34% saw an increase in incomes, this was still a slight two percentage point decrease from Q3 2023.

Meanwhile, 44% of households indicated their incomes remained unchanged, yet a considerable portion (22%) reported a reduction. These figures revealed an environment of varied financial stability across the population.

Consumers remained optimistic despite current economic challenges within the country, such as higher-than-expected inflation and the risk of a continuation of an interest rate hike cycle.

An observed 74% of households in Q4 2023 expected an increase in their incomes over the next 12 months. In contrast, 20% foresaw their incomes plateauing, while a small fraction (6%) anticipated a decrease.

Gen Z and Millennials reported optimism in their finances in the next 12 months at 80% and 77%, respectively.

This optimism, reflecting resilience in the face of prevailing economic challenges, showcases the potential for recovery and growth. However, the picture varied when it came to debt management.

Only 59% expected to meet their current bills and loan obligations, whereas 34% of Gen Z and 42% of Millennial respondents indicated they wouldn’t be able to meet their bills/loan obligations.

The incomes of households changed in interesting ways. The main reasons for income growth were new business commencement (16%) and higher salaries (14%), while the main reasons for income decline were job losses (23%) and lower wages (17%).

These factors showed the fragile balance between career advancement, economic security and the role of entrepreneurship in improving financial well-being.

The 10 factors that impacted salaries in South Africa are listed in the infographic below.

Consumers adapted their budget strategies in response to these changes over the past three months: 29% paid down their existing debts faster; 25% saved more in emergency funds or stokvels; and 18% saved more toward their retirement.

For the next three months, almost half (47%) of respondents planned to cut non-essential spending; 38% planned to decrease their retail shopping activities and avoid big purchases.

Gen X and Baby Boomers planned to make the most significant cuts in discretionary spending at 51% and 56%, respectively. Regarding fulfilling bills and loan obligations, 34% aimed to dip into their savings, while 31% planned to make at least partial payments within their means to meet their commitments.

These strategies demonstrate proactive debt management. Looking ahead, expectations for changes in household spending diverged across generations.

For example, 41% of Baby Boomers and Gen X expected an increase in bills and loans, while younger Gen Z consumers (38%) predicted a rise in retail expenditure.

Interestingly, both Gen Z and Millennials intended to increase contributions to retirement funds and investments (44% and 40%, respectively), possibly curtailing large purchases, which they predicted would decline by 35% and 40%, respectively.

These expectations reflect a generational pivot toward securing long-term financial stability in the face of the current economic uncertainty.

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