Though the financial picture has darkened in 10 years, there are some of bright spots.
Expenses have significantly outpaced income growth, locking record numbers of consumers into frightening spirals of high-interest personal loans to make ends meet — and all too often, the higher the salary, the worse, instead of better, the picture.
But a growing number of people are taking control of their debts and learning how to manage their own finances.
These findings emerged from a decade of data at DebtBusters counselling outfit, painting a stark picture of SA families’ growing struggle to put food on the table.
The final quarter of last year was the firm’s 10th anniversary, meaning their Debt Index 2025 Q4 wraps up a decade of household data.
On the plus side, access to the two-pot retirement system has provided huge cashflow relief to many who chose to withdraw a portion of their savings.
Also, series of interest rate reductions in 2025 has eased pressure on consumers and improved confidence.
Inflation is now at one of its lowest rates in decades.
But, said DebtBusters head Benay Sager, as purchasing power plunges, electricity tariffs have soared.
Where R100 purchased about 92.6 kW/h in 2016, today that same R100 buys 34.2 kW/h and fuel prices are 74% higher.
By contrast, income growth has lagged considerably.
“Many people who applied to us for debt counselling in Q4 needed 71% of their take-home pay to service their debt,” said Sager.
“This is the highest level we’ve seen since 2017.”
A record 96% of consumers had a personal loan, and almost two-thirds had a high-interest loan linked to their monthly paycheck – another record.
Compared to 2016, purchas purchasing power has collapsed. What you could get then for R100, today would cost nearly R200, yet incomes grew by only 2%.
Large numbers of consumers spend more than two thirds of their take-home pay servicing their debt — and the higher the earnings, the worse this picture gets.
Sager said most applicants taking home less than than R35,000 a month use about 71% of their income to service their debt.
However, with earners of above R35,000 this increases to 85% instead of reducing, and their debt-to-income ratio is at record levels — 210%.
This is unsustainable — it means for every R10 they earn, they owe R21.
For those earning more than R35,000 a month, unsecured (high-interest) debt is 75% higher than in 2016.
Light at the end of the tunnel
The release of the Q4 2025 Debt Index coincides with National Debt Awareness Month 2026.
This year’s theme, ‘Know your debt’, focuses on empowering South Africans to take control of their financial health by understanding their debt and credit standing.
And here is where the picture lightens considerably.
Many consumers are taking the initiative, with subscriptions for online debt management tools up 41% from the year before.
“Debt counselling is the best way to restructure debt and negotiate it to more manageable levels, reducing the amount of unsecured debt,” Sager said.
“The benefits are considerable, not just for the people who completed debt counselling – almost 12 times the number of 2016.
“In 2025, our clients repaid R5.3bn to creditors, allowing this money to flow back into the economy.”
Does debt counselling deal with loan sharks?
Whether debt counselling can help with loan sharks depends on local laws and the specifics of the loan shark’s operations.
If the “loan shark” is a registered credit provider under the National Credit Act (NCA), their debts can be included in the debt review process. The debt counsellor can challenge any predatory or illegal interest rates they may be charging.
If the “loan shark” is an informal, unregistered, illegal operator, the debt counselling process has no legal authority over them. A formal, court-sanctioned debt plan will not protect someone from an illegal lender’s collection methods, as these individuals operate outside the law.
In these cases, the recommended course of action is not debt counselling but contacting law enforcement or a regulatory body like the National Credit Regulator.
Debt counselling provides a structured, legal pathway out of formal debt, but it cannot legally enforce terms on illegal entities.
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