New research from Eighty20’s Credit Stress Report shows that South Africans earning over R180,000 per year are increasingly accessing more credit but struggling to meet repayments. This trend signals rising financial pressure across multiple income segments and is not sustainable.
The report highlights that over-indebtedness increased in the fourth quarter of 2025, with more consumers defaulting on loans and overdue balances continuing to grow.
Credit Uptake and Defaults
While seasonal borrowing usually rises in the fourth quarter, the latest data indicates worsening repayment behavior:
- Total open loans increased by 1.9% to 55 million
- Outstanding balances rose by R44 billion to R2.66 trillion
- 40% of credit-active South Africans are now in default (three or more months in arrears)
- Overdue balances jumped R12 billion in the quarter, up 6%, and now total R224 billion, representing 8.4% of total debt
“The sustained rise in defaulters and accumulation of overdue balances is accelerating rather than stabilizing,” the report said.
Middle-Class Workers Under Pressure
Eighty20 identifies “Middle-Class Workers” as credit-active adults earning around R15,000 per month (R180,000 annually), with household incomes between R8,000 and R30,000.
Key findings for this group:
- 3.7 million credit-active individuals, holding 13.1 million active loans
- 1.4 million new loans originated in the quarter, 74% personal loans
- Overdue balances rose 7.7% YoY to R88.2 billion
- 42% now have at least one loan in default
- Average of 37% of net income goes toward debt repayments
High Earners (“Heavy Hitters”)
The top 5% of earners (R30,000+ per month, average R42,000/month) also face mounting pressure:
- 2.3 million credit-active individuals, up 7% YoY
- 820,000 new loans in the quarter (34% increase YoY)
- Home loans are the largest debt portion, with balances rising 7% YoY to R1 trillion
- Overdue debt reached R59 billion, driven by:
- 25% increase in credit card arrears
- 21% increase in home loan arrears
- 19% increase in personal loan arrears
- 48% of monthly income goes toward debt servicing
Retirees and Older Consumers
Even older South Africans are increasingly relying on credit:
- The “Comfortable Retirees” group grew 10% YoY to 1.5 million
- 233,000 new loans in the quarter (35% increase YoY)
- Personal loans dominate, accounting for 70% of new borrowing
- Suggests retirees are using loans for living expenses rather than investment
Overall Household Debt Trends
Across all segments:
- South Africans spend an average of 29% of net income on debt repayments
- Rising defaults and overdue balances highlight widespread financial stress, particularly among middle-class workers and high earners
Eighty20 warns that this trend is unsustainable and signals increasing financial vulnerability across income groups.
Credit stress is rising sharply in South Africa, especially for those earning R180,000+ annually. Middle-class workers, high-income earners, and retirees are all facing growing overdue balances and repayment difficulties.
Households should carefully manage borrowing and repayments to avoid worsening financial strain, while policymakers may need to consider interventions to protect financially vulnerable groups.
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