Trevor Manuel, who was the minister of finance at the time, launched National Savings Month in 2001. Every July, the South African Savings Institute conducts the campaign (SASI)
The annual campaign seeks to increase understanding of financial planning and saving as well as make all South Africans informed and involved with investments and saving.
The institution celebrated its twentieth anniversary last year, through the #waystosave financial literacy education campaign, SASI focused on financial education during July Savings Month with support from Absa and the IDC. Financial experts were invited to provide their practical advice on saving.
SASI Chairperson Prem Govender says, “There is an urgent need to equip young people with the savings know-how that can directly impact their earning power, wealth creation abilities, and happiness. South Africa’s household saving rate has declined to -0.5% of GDP, while our household debt as a percentage of disposable income is currently 71.9% – meaning that for every rand earned, nearly three quarters is spent on debt.”
The organization will offer a series of in-depth webinars on students, stokvels, entrepreneurs, and women throughout the month of July, giving numerous people the chance to concentrate on their financial health. Leading voices in financial literacy have joined with SASI to provide savings tips and tools in a variety of languages.
Absa Retail and Business Banking’s Thami Cele, Head of Saving and Investments, says “We are proud of what has been achieved during our four-year partnership with SASI. We have supported vital financial literacy awareness and initiatives that help people to make good saving and investment decisions”.
The twentieth anniversary of SASI was in 2021. The organization is still working to spread a savings culture and hopes that more South Africans will become aware of the value of saving as a result of its initiatives and campaigns.“The fact that July Savings Month, a SASI initiative, is now observed nationally is a testament to the efforts of all the individuals who over the years have contributed to SASI’s success. We thank our long-standing Chairperson Prem Govender and the SASI Board for seeing SASI’s continued relevance in a digital age,” says Mwandiambira.
According to Statistics SA, South Africa’s household saving rate rose from 0.30 percent in quarter 2 to a little over 1 percent in quarter 3 of 2021. South Africans still have a long way to go, especially given their general financial well-being at retirement age, despite the considerable gain.
Less than 10% of South Africans, according to statistics, have plans in place to retire comfortably by the age of 65, which means they will need to work longer hours or save more aggressively in order to maintain their standard of living in their golden years.
SASI Chairperson Prem Govender says, “Improvements in the level of household net wealth are encouraging and it shows we can save when under pressure. However, South Africa still has one of the lowest Household Savings Ratios in the world. At SASI, we believe a strong focus on financial inclusion by improving financial literacy across the population is key to improving this ratio. In our increasingly tough economic environment, we need to find ways to save and avoid the credit trap. As the economy gradually recovers, interest rates may rise over the short to medium term, which will make paying off debts more difficult. We need to avoid financial blind spots and drive a savings culture to break the cycle of inter-generational debt.”
The National Treasury acknowledged the low rate of retirement savings in the nation and suggested changes to the legal system in December 2021. This includes a brand-new “two pot” system that would let South Africans withdraw money from their savings earlier than usual. The need that the other two-thirds be long-term conserved will go along with this.
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