COVID-19's current and future impact on household budgets, spending and debt
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Consumer Pulse Study
COVID-19’s current and future impact on
household budgets, spending and debt
SOUTH AFRICA Q2 2021
TransUnion’s quarterly survey helps to understand how consumers’ personal finances have been
impacted by the COVID-19 pandemic. The study measures changing consumer attitudes and behaviour
based on the dynamics of income, debt and identity theft. The analyses and insights inform decision-
making to empower consumers and help businesses create economic opportunity for consumers.
Key Takeaways
Financial impact and concern regarding ability to pay loans remain high
Ahead of the beginning of the third COVID-19 wave, 61% of South Africans reported they’re
currently being negatively financially impacted as a result of the pandemic. Incomes have
primarily been impacted by job losses, and reduced salary and work hours. Consumers
remained highly concerned about their ability to pay their bills and loans, with credit
obligations topping the list of bills they said they won’t be able to pay.
Just over two in five consumers (43%) reported they’ve been in arrears for a bill or loan in the
past three months, indicating a substantial proportion of South Africans are still struggling to
make their payments. Of consumers who missed payments in the last three months, 31% have
missed a payment on one account, 33% on two accounts, and 17% on three accounts.
Opportunities for credit growth
Consumers do however, express the need and appetite for credit — 85% of households
consider access to credit extremely, very or moderately important, but only 27% believe
they currently have sufficient access to credit. A third (33%) plan to apply for new credit
or refinance existing credit within the next year. Channels of preference when acquiring
new credit include in-person at a branch (33%), online via a computer (19%), and online via a
website on a mobile phone (18%).
South Africans remain hopeful and resilient
South Africans remain upbeat and positive — 75% are optimistic about the future, with 52%
confident their household finances will fully recover in the next 12 months. To weather
the pandemic storm, consumers have made budgetary adjustments by cutting back on
discretionary spending, and reducing digital services, subscriptions and memberships.
Nineteen percent said they moved to a cheaper home, and to supplement income, 18% of
consumers said they started doing gig work (freelance work), 17% started a small business,
and 17% began selling goods informally.Financial HArdship
Household income (HHI) and bill payment impact
At the beginning of June, just a few weeks before the onset of the third wave of the pandemic in South
Africa, 61% of respondents indicated their household income is currently being negatively impacted due
to COVID-19. This is similar to March 2021 (62%) but significantly lower than the all-time high of 84% a year
ago (survey 28 May to 1 June, 2020).
The youngest generation surveyed, Gen Z, appear to be the generation whose income is least negatively
impacted, with 49% saying their income is currently decreased due to pandemic compared to 67% for
Millennials, 65% for Gen X and 67% for Baby Boomers. The main reasons consumers reported their
household income decreased was as a result of job loss, and reduced salary and work hours. In particular,
40% of all surveyed consumers said someone in their household lost their job, while 38% and 28%
indicated someone in their household had their salary and work hours reduced, respectively. Forty-five
percent of lower-income consumers (households earning less than R50,000 per year) indicated someone
in their household lost their job in the past month.
Consumers whose income is currently decreased remain highly concerned about their ability to pay
their bills and loans (88%, up by one percentage point from March 2021 and four percentage points from
Dec. 2020). Credit obligations remain the top concern with 44% of all consumers with Mashonisa loans
reporting they’re unable to pay that bill, 37% of personal loan holders, and 30% of retail account and
credit card holders.
Forty-three percent of all consumers surveyed reported they’ve been in arrears for a bill or loan in the
past three months, indicating just under half of consumers are still struggling to make payments.
Only 4% of surveyed households indicated their finances have fully recovered since being impacted
by the pandemic. Just under half (48%) said they have not recovered. However, South Africans remain
upbeat — 75% are optimistic about the future, with 52% confident their household finances will fully
recover in the next 12 months.
To supplement income, 18% of consumers said they started doing gig work (freelance work), 17% started
a small business, and 17% began selling goods informally.
Figure 1. Household income decreased Figure 2. Expect household income to Figure 3. Expect to be unable to pay
due to pandemic decrease in the future at least one of their current bills
and loans in full
46%
4%
30%
47%
31 % 6%
61% 53 %
23%
9 % 1%
Currently decreased
Unable to pay
Never decreased
Yes No Not Sure Able to pay
Previously decreased
X% Percentage point change from Q1 2021
X% Percentage point change from Q1 2021 X% Percentage point change from Q1 2021
2 | Consumer Pulse Study: Q2 2021Figure 4. Consumer financial situation due to pandemic
Thriving HHI has not decreased, and household finances
in 2021 are better than planned
1% 1%
HHI has not decreased, and household finances
Stable in 2021 are as planned
0% 8%
HHI has not decreased, but household finances
Impaired in 2021 are worse than planned 1
1%% 0%
HHI has decreased during the pandemic (currently
Resilient or in the past), but finances have fully recovered
1% 4%
Hopeful HHI has decreased, but think finances will recover 0% 45%
In Limbo HHI has decreased, and unsure or slightly
doubtful that finances will recover
3% 39%
Devastated HHI has decreased, and don’t think finances will
ever recover
1% 3%
X% Percentage point change from Q1 2021
Figure 5. Bills and loans unable to pay (among those with these bills/loans)
44%
3%
37%
7%
30% 30%
9% 7%
25%
18% 22% 21% 21%
20%
6
%
8% 6% 18% 18% 18%
0%
19% 0% 5%
16% 15%
1%
11%
13% 13%
9% 4%
8%
5%
Mashonisa loan
Personal loan
Account with retail/
clothing store
Private student loan
Medical bills
Auto insurance
Credit card
Home laon
Rent
Utilities
Auto loan
Mobile
House/rental insurance
Auto lease
Internet
Life insurance
Buy now, pay later
X% Percentage point change from Q1 2021
3 | Consumer Pulse Study: Q2 2021Figure 6. Plans to pay current bills or loans (among those unable to pay bills/loans)
Overall Gen Z Millennials Gen X Baby Boomers
Cashflow injection
Use money from savings 2% 31% 39% 32% 20% 27%
Borrow money from friends/family 5% 23% 26% 20% 32% 0%
Use unemployment benefits 3% 10% 7% 12% 8% 8%
Claim credit insurance 2% 5% 6% 4% 5% 0%
Existing accounts
Pay partial amount 1% 37% 27% 42% 44% 31%
Refinance/renegotiate payments/rates 2%
14% 10% 17% 13% 12%
Payment holiday/other accommodation 1% 7% 7% 7% 8% 4%
New credit
Take out personal loan 1% 7% 11% 6% 7% 0%
Use credit card available balance 0% 5% 9% 2% 7% 4%
Open new credit card(s) 2%
3% 4% 2% 5% 0%
Don’t know
I don’t know how I’m going to pay 3% 16% 18% 14% 14% 38%
X% Percentage point change from Q1 2021
Figure 7. Types of bills or loans enrolled in financial accommodation in past year (among those with that bill/loan)
13%
8% 12% 12%
9% 4%
10%
2%
8%
0% 7% 7%
5% 5% 6% 6% 6%
0% 7% 1% 5% 5% 5%
3 % 1 % 4%
4%
1% 3% 3% 3%
0% 1% 0%
Private student loan
Auto loan
Home loan
Personal loan
Auto insurance
Medical bills
Credit card
Auto lease
Account with retail/
clothing store
Mashonisa loan
Life insurance
Rent
House/rental insurance
Buy now, pay later
Utilities
Internet
Mobile
X% Percentage point change from Q1 2021
4 | Consumer Pulse Study: Q2 2021Financial Inclusion
Attitudes and plans for economic participation
While 85% of households consider access to credit extremely, very or moderately important (with 30%
considering it extremely important), only 27% believe they currently have sufficient access to credit.
Forty-five percent of surveyed consumers considered applying for new credit or refinancing existing
credit but ultimately decided not to — 34% believed their application would be rejected due to their
income/employment status; 30% felt the cost of new credit or refinancing was too high, and 26% thought
they’d be rejected due to their credit history.
Consumers do express appetite for credit with a third (33%) saying they plan to apply for new credit or
refinance existing credit within the next year. The top types of new or refinanced credit they plan to apply
for are: a new personal loan (39%), credit card (33%) and home loan or bond payment (30%).
Figure 8. Believe have sufficient access to credit Figure 9. Believe important to have access to credit
and lending products to achieve financial goals (extremely or very important)
Overall 27% Overall 59%
2
% 5%
Gen Z 22% Gen Z 59%
Millennials 28% Millennials 59%
Gen X 32% Gen X 65%
Baby Boomers 31% Baby Boomers 39%
X% Percentage point change from Q1 2021 X% Percentage point change from Q1 2021
5 | Consumer Pulse Study: Q2 2021Figure 10. Plan to apply for new credit or refinance existing credit within the next year
By generation By credit score
767 - 999 26%
681 - 766 48%
35% 34% 33% 614 - 680 43%
583 - 613 37%
527 - 582 32%
18%
487 - 526 36%
0 - 486 25%
Don’t know
credit score 17%
Gen Z Millennials Gen X Baby Boomers
Self-reported credit score ranges
Figure 11. Credit monitoring frequency Figure 12. Believe monitoring credit is important
38%
Daily 0% 8% 3%
Weekly 3% 16% 30%
4%
Monthly 0% 30%
Quarterly 0% 13%
17%
Yearly 1% 7% 1%
Less than yearly 1% 5% 8% 7%
21%
2%
I don’t monitor my credit 5% 4%
X% Percentage point change from Q1 2021 Extremely Very Moderately Slightly Not at all
X% Percentage point change from Q1 2021
6 | Consumer Pulse Study: Q2 2021Figure 13. Changes to household budget in the last three months
Overall Gen Z Millennials Gen X Baby Boomers
Spending
Cut back on discretionary spending 1% 66% 55% 67% 76% 86%
Cancelled subscriptions/memberships 3% 40% 35% 43% 38% 49%
Cancelled/reduced digital services 2% 34% 30% 37% 34% 39%
Added/expanded digital services 5%
20% 21% 22% 19% 10%
Increased discretionary spending 1% 10% 14% 10% 6% 2%
Added subscriptions/memberships 2% 10% 15% 9% 5% 2%
Debt & savings
Paid down debt faster 4%
27% 30% 28% 19% 16%
Saved more in emergency fund 0% 25% 30% 28% 13% 12%
Cut back on saving for retirement 2% 17% 12% 17% 23% 27%
Increased usage of available credit 2%
16% 7% 19% 23% 22%
Saved more for retirement 3% 11% 16% 10% 8% 10%
Used retirement savings 4% 10% 7% 10% 10% 33%
X% Percentage point change from Q1 2021
Figure 14. Expected change to household spending over next three months
Bills and loans 8% 19% 36% 15% 14% 8%
Retail (clothing, electronics, etc.) 7% 16% 26% 19% 24% 8%
Discretionary spending (eating out, entertainment) 4% 11% 21% 21% 36% 6%
Digital services 6% 16% 41% 18% 13% 6%
Medical care/services 10% 19% 39% 12% 7% 13%
Retirement funds/investing 10% 19% 31% 11% 12% 17%
Large purchases (appliances, cars) 4% 13% 20% 16% 30% 16%
Increase a lot Increase a little Remain the same Decrease a little Decrease a lot Not applicable
Figure 15. Expected change in number of online transactions over the next three months
30%
24%
17%
12%
10%
8%
Increase Increase Remain Decrease Decrease I don’t do any
a lot a little the same a little a lot transactions online
7 | Consumer Pulse Study: Q2 2021Focus on Fraud
COVID-19 related digital fraud
Around two in five consumers (41%) reported they’re personally aware of a COVID-19-related digital fraud
attempt targeted at them in the last three months, and 7% are now a victim of the attempt.
The top type and fastest rising COVID-19-related digital scam is fake insurance, followed by
unemployment and third-party seller scams. Among those who said they were hit by COVID-19-related
digital fraud in the last three months, 27% said they were targeted with an insurance scam, up 10
percentage points.
Figure 16. Personal experience with digital fraud Figure 17. Digital fraud related to COVID-19 by generation
attempts related to COVID-19
61% 63%
I acted on a fraud
7 % 55%
scheme and am now
a victim of it 3% 45% 41%
36% 32 %
32 %
I have been targeted by
34%
9% 14%
a fraud scheme but did
not become a victim of it 2% 7% 5
%
Gen Z Millennials Gen X Baby Boomers
I am not aware of
any fraud schemes
58%
targeted at me 5% Acted on a fraud scheme Targeted by a fraud scheme but Not aware of any fraud
and am now a victim of it did not become a victim of it schemes targeted at me
X% Percentage point change from Q1 2021
Figure 18. Most frequent fraud schemes targeting consumers
(among those targeted with COVID-19 related digital fraud)
27%
10% 25% 24%
4%
1% 22%
6%
18%
2%
15% 15%
1% 2%
12%
10% 10%
3%
9%
4% 4%
3%
6%
2%
Fake insurance
Third-party seller
Unemployment scam
scams on legitimate
online retail websites
Phishing
Charity and
fundraising scam
Stolen credit card or
Shipping fraud
Identity theft
Someone changed your
personal or account
information via a call
Account taken over
and PPE
fraudulent charges
Fraudulent COVID-19
vaccines, cures, tests,
Stimulus check scam
X% Percentage point change from Q1 2021
8 | Consumer Pulse Study: Q2 2021Methodology
This online survey of 934 adults in South Africa was conducted 28 May–8 June 2021 by TransUnion
in partnership with third-party research provider, Qualtrics® Research-Services. Adults 18 years of
age and older residing in South Africa were surveyed using an online research panel method across a
combination of computer, mobile and tablet devices. Survey questions were administered in English. To
increase representativeness across South Africa resident demographics, the survey included quotas to
balance responses to the census statistics on the dimensions of age, gender, household income, race
and region. Generations are defined as follows: Gen Z, born 1995–2003; Millennials, born 1980–1994;
Gen X, born 1965–1979; and Baby Boomers, born 1944–1964. These research results are unweighted and
statistically significant at a 95% confidence level within ±3.21% percentage points based on a calculated
error margin.
For previous Consumer Pulse Studies, visit
transunion.co.za/consumer-pulse-study.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern
economy. We do this by providing a comprehensive picture of each person so they can be reliably
and safely represented in the marketplace. As a result, businesses and consumers can transact with
confidence and achieve great things. We call this Information for Good®.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions
that help create economic opportunity, great experiences and personal empowerment for hundreds of
millions of people.
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