elderly person abuse The rising debt levels among South African retirees pose significant financial challenges, with alarming statistics revealing a trend of increasing debt burdens that could jeopardise their financial stability in retirement.
Image: Karin Retief / File
Two recent credit-related surveys point to increasing debt among older South Africans, which is worrying, because ideally, your debt levels should start decreasing once you get past middle age. Older people have health-related expenses that younger people don’t generally have, and, once they retire, need to ensure that their pension income can sustain them for the rest of their lives. They don’t have the luxury of expected pay rises or promotions. A weighty debt burden is the last thing they need.
The DebtBusters Debt Index for the 4th quarter of 2025, released last month, shows that:
The Eighty20 Credit Stress Report for the same period also reveals worrying debt patterns among older consumers, and it highlights two concerns: a sustained rise in the number of defaulters, and a steady accumulation of overdue balances, “both of which appear to be accelerating rather than stabilising”, the report says. “While the total number of defaulters across the general population has declined nearly every quarter since mid-2023, seniors have moved sharply in the opposite direction.”
The report tracked the credit health of relatively affluent “Comfortable Retirees”, who saved for retirement and are mainly dependent on their savings for a pension income. It notes that the number of credit-active Comfortable Retirees showed “substantial” year-on-year growth of 10%, to 1.5 million individuals.
The segment opened 233 000 new loans during the quarter, representing a 35% increase year-on-year, with 70% of new loans being personal loans. “This emphasis on personal loans suggests that this segment uses credit for more immediate needs, such as living expenses,” the Eighty20 report says. Total loan balances grew 9.4% year-on-year to R217bn, while overdue balances rose 18% over the same period.
The report found that Comfortable Retirees, on average, spent 21% of their monthly income on debt repayments, up from 20% in 2023.
Your ideal ‘debt curve’
Ideally, as you get older, your assets should increase, and your debts and other liabilities decrease, so that, by the time you reach retirement age, you have a basketful of assets, possibly including a paid-off property, zero debt, and you’re free of other demands on your finances, such as children.
Let’s consider the “debt curve” of an average working person. When you start your first job, you have zero assets and, unless you have a student loan, zero debt. Part of your income will go towards everyday living expenses and part towards savings, but you will probably also acquire expensive items, such as a car and household appliances, using credit. Your debt will grow, but so should your savings, even if you are only contributing to your company retirement fund.
The big jump in debt comes if you buy a property. Your debt to annual net income ratio could easily reach 250%: this would occur with a net income of R600 000 and a bond of R1.5 million. But there will be a corresponding jump in your assets, because a property is an investment that should appreciate over time.
It’s at this point in your life, perhaps in your early to mid 30s, that your “debt curve” should theoretically be at its peak. If you’re earning well and have good prospects, it might peak a little later, perhaps in your early 40s, if you move to a bigger house.
But as you continue to pay off your bond, which is typically one’s biggest liability, your overall debt will start coming down.
Considering the term of a bond, which is 20 to 25 years, by your late 50s or early 60s your bond should be paid up. Ideally, by then you should be able to rely on your assets, accumulated over your working years and including your property, to sustain you in retirement.
Financial advisers and investment experts continually bemoan the fact that most people do not save enough for retirement. There’s one thing worse: it’s not saving enough and going into retirement with significant debt on your shoulders.
Care and attention
Financial education plays a big role in helping people, especially seniors, stay in control of their money,” says Dhashni Naidoo, consumer education programme manager at FNB. “Just as your body needs regular care, so do your finances. Ignoring small issues, like missed payments or untracked expenses, can lead to bigger problems down the line.”
Naidoo suggests focusing on paying off your existing debt and using credit only when it’s absolutely necessary. “The less you owe, the more freedom you preserve,” she says, adding that you need to know your financial priorities lie. “Essentials like food, housing, and healthcare come first. In tight months, focus on what’s necessary. Cutting back on unplanned extras can protect your long-term financial well-being.”
* Hesse is the former editor of Personal Finance.
PERSONAL FINANCE