<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
SIMON BROWN: I\u2019m chatting with Andrew Fulton, director at Eighty20. Their recent 2025 Q4 Credit Stress Report is out. Andrew, we appreciate the time. Focusing on South Africans in their golden years \u2013 what we are seeing is an increasing aged population. This is a global trend, with medical advances and declining birth rates, but older folks are making up a more significant part of the population.<\/p>\n
ANDREW FULTON: Yes, thanks for having us on the show. It\u2019s certainly a demographic trend that we\u2019re seeing globally and particularly in South Africa. The number of South Africans in their \u2018golden years\u2019 is growing and accelerating.<\/p>\n
So we thought that we would do a deeper dive into them and their credit situation, just to give us an idea of how credit is affecting that demographic.<\/p>\n
SIMON BROWN: And what are we seeing? In the immediate I kind of thought \u2013 to be clear, I\u2019m not yet in that demographic so I speak from ignorance \u2013 that then credit would be fairly low in demand because of fixed income, but your data says otherwise.<\/p>\n
ANDREW FULTON: Yes. We do a segmentation of all South Africans called the Eighty20 National Segmentation, and we have two elderly segments of 65-plus retired or elderly, or whatever term you want to use.<\/p>\n
The one is \u2018comfortable retirees\u2019. There are two million more affluent. These are the people who had good jobs during apartheid, were able to save for their retirements, and actually the second most affluent of our segment.<\/p>\n
The other segment is the \u2018humble elders\u2019. That\u2019s four million at the sort of bottom of the pyramid, and financially vulnerable.<\/p>\n
So we\u2019re not looking at 65-plus as a general group, we are looking at those two different segments \u2013 and they do have very different credit holdings.<\/p>\n
SIMON BROWN: What are you finding between the two, the \u2018humble elders\u2019 and the \u2018comfortable retirees\u2019? Who is taking the loans? Who is managing them well?<\/p>\n
ANDREW FULTON: It is a really interesting conversation. If we look, the humble elders, the sort of financially vulnerable, are predominantly female, struggling financially. They really are that lost apartheid generation. They weren\u2019t able to earn or save or invest, and now they\u2019re retiring, dependent on the family and the state with Sassa grants or family. They took out about 610\u00a0000 loans in quarter four, which is quite a lot, but concentrated in retail and personal loans. They don\u2019t qualify for credit cards, so they\u2019re using those two credit vehicles to cover their household expenses.<\/p>\n
SIMON BROWN: And the \u2018comfortable retirees\u2019, where are they borrowing? I\u2019m assuming there must be some loan activity happening in that space as well.<\/p>\n
ANDREW FULTON: Absolutely. It\u2019s a smaller segment, so it\u2019s only two million people. All of those are credit active. They took out about a significant 230 000 new loans in quarter four. And 30\u00a0000 of those people do have a mortgage and make up about 13% of all home loans. So they are in that secured credit space because, as I said, they are the second-most affluent of our segments. But they\u2019re certainly coming under pressure.<\/p>\n
Read: Retirement income: Bond yields are the price of certainty
What SA\u2019s changing retirement system means for your savings<\/p>\n
They\u2019ve scaled back on their secured credit since last year, probably due to repayment pressures with disposable income shrinking because of inflation and other costs. Yes, they are on a fixed income. The other thing that\u2019s fascinating to think about with this group is they face particular biases and difficulties. They\u2019ve got low financial resilience. They\u2019re digitally excluded. They\u2019re not able to kind of as easily go onto an iPad and take out a loan. They\u2019re living on fixed, limited incomes. And let\u2019s be honest, there\u2019s age discrimination in many areas \u2013 the workforce, in lending, and in other areas. So it is quite a marginalised group in that way in that space.<\/p>\n
SIMON BROWN: Do we see higher or worsening default levels in the sort of \u2018older\u2019 \u2013 or is that not something you looked at?<\/p>\n
ANDREW FULTON: We actually did look at defaults in that particular area. So we saw a sustained rise in the number of defaulters, which is accelerating rather than stabilising. What\u2019s particularly worrying about that is that with the general population, the number of defaulters has declined every quarter since 2023, and the 65-plus moving in the other direction.<\/p>\n
That makes them unique among our age segments and obviously also particularly worrying.<\/p>\n
SIMON BROWN: And as you are saying, it paints a depressing picture because if I find myself in a bad credit situation, I could get a second job, I could get a side hustle, I could try something on my mobile. But for a senior, a retiree, it\u2019s a whole different game. In theory they\u2019ve finished earning now; they\u2019re now in the spending part.<\/p>\n
ANDREW FULTON: Exactly, exactly. If you read the research on retirement it is quite frightening. It\u2019s sobering. FNB finds that only 10% of South Africans believe they\u2019ll be able to retire comfortably at age 60. And now with the two-pot system what we\u2019re seeing is that a lot of people are making that future situation even worse to pay for today\u2019s needs and expenses. They\u2019re withdrawing money and they\u2019re not replacing that. So it is sobering.<\/p>\n
SIMON BROWN: And as part of that, the 10X\u00a0Retirement Reality\u00a0Report always comes back to that 6% number \u2013 it\u2019s probably a global number, but it\u2019s definitely applicable here. Of course, it\u2019s not just that your income is fixed or maybe you\u2019re getting growth, a fixed annuity or something like that, but your costs are typically well ahead of inflation. I\u2019m thinking of medical costs; those are not sort of going along at 3%, 3.5% a year.<\/p>\n
ANDREW FULTON: Absolutely. That\u2019s when you\u2019re experiencing probably your highest medical expenses in your life. That\u2019s when all those things start breaking down. We\u2019ve seen medical expenses are typically double CPI. So if you didn\u2019t plan properly during your career that can come back to bite you.<\/p>\n
SIMON BROWN: It absolutely can. The key lesson is to try to not be in that 94%; try to be in the 6%. It is easy for me to say; it harder for some to do it.<\/p>\n
We\u2019ll leave it there. Andrew Fulton, director at Eighty20, appreciate the time.<\/p>\n
Listen to the full MoneywebNOW podcast every weekday morning here.<\/p>\n
#Credit #crunch #golden #years<\/p>\n","protected":false},"excerpt":{"rendered":"
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