The latest Old Mutual Savings & Investment Monitor research shows that the “next generation” is in need of guidance and requires an urgent shift in behaviour and attitude towards long term savings, and the future lifestyle benefits of effective money management.
It is important to start by getting young children to understand the importance of savings and getting them to save wisely as early as possible.
Since 2009, Old Mutual has probed the savings habits of South Africans through a six-monthly survey. It has found that many households are caught between their limited incomes and the desire to save for their retirement or their children’s education.
What is the Old Mutual Savings & Investment Monitor?
The Old Mutual Savings & Investment Monitor surveys the savings and investment habits and behaviours of working metro households in South Africa.
It’s a face-to-face survey done by Peppercorn Research using a sample of 1 000 working metropolitan households in Johannesburg, Pretoria, Cape Town, Durban, Port Elizabeth, East London and Bloemfontein.
The survey is repeated twice a year in July and November using different samples each time.
The research is consistent and can be compared year on year, so trends, patterns and effects become easily identifiable.
It allows individuals to compare and relate their own savings behaviour with those of other households, and it raises awareness of the importance of savings.
What are our South African youth (18 to 30 years old) doing with their money and how are they planning for their futures?
July 2013 statistics show:
• 30% believe that saving for the future is not a priority right now
• 45% of the working metro youth do not contribute to any form of formal retirement plan such as a pension or provident fund
• Only 13% contribute to a retirement annuity
• 35% believe that the government will look after them if they are unable to look after themselves
• 35% believe that their children should look after them when they are old
• 45% are planning on supporting parents (and 16% not planning to support parents, but realise than they will have to)
• 34% are savings to purchase a vehicle
• 28% are saving for a deposit on a home
• 83% want to learn more about how to save
• 68% are having to cut down on expenses (55% in July 2012, 36% in July 2011)
• Perception of length of short, medium and long-term investments:
• 72% of the youth market view short term as up to three years
• 73% view long term as up to 20 years
Old Mutual believes the key to positively changing the long-term savings mindset involves two simple actions.
Firstly, get expert financial advice. Let the experts tell you what will work best for you in terms of your needs analysis and future aspirations.
Secondly, be financially educated by understanding your finances, managing them and being in control of your future. Use the tools available to you to empower yourself with the financial knowledge that will help you make wise and positive long terms savings decisions.
To get expert financial advice call 0860 WISDOM (947366) or visit www.oldmutual.co.za/savingsmonitor