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SIMON BROWN: I’m chatting now with Dr Frank Magwegwe. He is Nedbank executive for financial wellness and advisory. Dr Magwegwe, I appreciate the early morning time. Your latest Nedbank NedFinHealth index – it’s the third year you’ve been doing it – for the third year in a row has shown that South Africans’ financial health is improving slowly but moving in the right direction. This is an encouraging sign.
FRANK MAGWEGWE: Indeed. Good morning, Simon, and thank you so much for having Nedbank on the line early in the morning. We love talking about the NedFin Monitor.
Maybe to just position it quickly, Simon, what we do is that we look at the four things that individuals really do with their money. In other words, we talk about borrowing, we talk about planning, we talk about saving and spending. You are quite right that we have seen improvement, especially on the day-to-day [aspect]. When we talk about day-to-day, we look at spending, are people tracking spending a day, managing money within their budgets. Do they have debt that they feel is manageable? Certainly we have seen improvement on those measures.
However, Simon, what is very interesting is that consumers are still a little cautious about the future. When you look at planning, planning is about having adequate insurance, about working with financial advisers, about having emergency savings and saving for retirement, for example. We are seeing individual scores that were flat to a little lower year on year. So individuals are somewhat less confident about the future. Yet day-to-day managing of money has improved.
SIMON BROWN: That in a sense makes some sense, right? I need to be sort of in control and feel in control of my day-to-day. And when some of that has been happening and I can look back and say the past year has gone better than I thought it [would], then I start to build future confidence around my financial situation.
FRANK MAGWEGWE: Indeed. And you are talking now around, for example, the bond market and the GNU, and generally where interest rates are. You’re quite right, Simon, that individuals could take that into account. There’s a little bit of uncertainty. You know there are promises but the government doesn’t seem to implement. Then of course we see problems like water [shortages] and perhaps what we are hearing around is the return of load shedding. So when individuals are managing their money day to day, you’re quite right that that sort of blurs the future. It becomes a little more uncertain. Hence, they are a little cautious about the future. But they are doing the best they can with what they can control, which is managing their borrowing, which is putting a little money aside, which is tracking their money to make sure they are allocating it in the right categories as far as their day-to-day finances are concerned, which is quite pleasing, Simon.
SIMON BROWN: Absolutely. But are we then seeing maybe not a marked shift, but a bit of a shift towards that longer term? Here I’m thinking of wealth creation, but also ultimately retirement. Are we seeing most South Africans perhaps looking towards their retirement and starting to think about that? Again, maybe in small steps only.
FRANK MAGWEGWE: Indeed. That’s another element. I would almost say ‘muted’. Simon, what I mean by that is that for example in 2024 we saw almost 70% of the representative sample of South Africans that we interviewed saying they are putting aside money to start a small business, they are using money to reduce debt. Where is the 2025 run of the NedFin Monitor? We saw individuals in the top three, Simon. When asked, ‘What are your top three financial goals?’ [responses] included putting money aside for education and putting money aside for retirement. That is one piece of evidence that shows us [people] thinking about retirement.
The other even more important thing, Simon, was we had 50% of working South Africans in 2024 saying their financial situation was so bad that they didn’t want to talk to a financial advisor; … financial plan. Interestingly, in 2025 we saw that falling to about a third. So really a big decline. And individuals are saying they are more comfortable approaching and working with a financial advisor.
And we know individuals who work with financial advisors, among the discussions they have is to build an emergency fund. Are you contributing to a company pension fund? Do you have a retirement annuity? So there is indeed evidence that we see a shift.
What is still a little concerning, Simon, is that we continue to see an uptick in individuals asked, ‘If you have financial problems, how would you address them if you have an emergency?’ responding ‘I’d go and get a loan’. And sadly we also still see ‘I’d go into the two-pot system and use money that’s there’.
SIMON BROWN: Ah, yes. And I appreciate it, the two-pot. It’s kind of there for [that], but I suppose it’s the magnitude of the emergency perhaps.
We’ll leave it there. Dr Frank Magwewe, Nedbank executive for financial wellness and advisory. there.
FRANK MAGWEGWE: I appreciate your having us on this show.
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