South African households are increasingly demonstrating an ability to adjust and recalibrate their finances despite continued pressure from elevated living costs, according to the most recent Q4 2025 Consumer Pulse Study released by TransUnion.
Key Takeaways
- More deliberate financial behaviour: Consumers are actively tightening budgets, reassessing spending priorities and using digital tools to manage money more effectively amid ongoing cost pressures.
- Shift from short-term coping to long-term planning: Households are moving away from reactive financial decisions, focusing instead on reducing debt, cutting non-essential expenses and planning ahead for future needs.
- Growing confidence through financial awareness: Increased financial literacy and intentional money management are helping consumers build confidence rooted in adaptability and informed decision-making.
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Consumers Embrace More Disciplined and Intentional Money Management
Although inflation, rising prices and affordability constraints remain part of everyday life, consumers are becoming more deliberate in how they manage their money. Many are tightening household budgets, reassessing spending priorities, strengthening savings habits and improving both their financial literacy and use of digital tools.
The research indicates that households are entering 2026 with a stronger sense of discipline around money management. Rather than relying on short-term coping mechanisms, consumers are making more considered decisions, cutting back on non-essential expenses, actively reducing outstanding debt and planning more intentionally for future financial needs. This shift reflects a form of confidence rooted in awareness, adaptability and informed decision-making.
Adjusting Financial Behaviour in a High-Cost Economy
Nearly half of South African respondents, representing 48 percent, reported that their household finances were better than they had initially anticipated during the fourth quarter of 2025. This suggests a degree of stabilisation, even though the broader economic environment continues to be shaped by high costs and limited disposable income. At the same time, financial stress remains evident, with 36 percent of consumers expecting that they may struggle to pay at least one bill or loan instalment in full.
To manage these pressures, households are taking practical and deliberate steps to regain control. Around half of consumers have reduced spending on discretionary items such as eating out, entertainment and leisure travel. In addition, more than a third, or 34 percent, have cancelled subscriptions or memberships in an effort to eliminate unnecessary monthly expenses.
Subscription reviews are often overlooked, yet cancelling unused services can immediately improve monthly cash flow.
Alongside cost-cutting, many consumers are focusing on longer-term financial health. About 38 percent plan to increase their contributions towards retirement savings or investment products, while 35 percent intend to accelerate the repayment of existing debt. A further 27 percent are prioritising the growth of emergency savings, including contributions to stokvels or similar community-based savings schemes.
These behaviours suggest that households are moving beyond reactive responses to economic pressure. Instead, they are actively working to strengthen financial resilience by balancing immediate stability with future preparedness. The data reflects a growing trend towards more structured and strategic money management across income groups.
Generational Differences Shape Financial Outlooks
Younger Adults Show Optimism and Appetite for Credit
The study highlights notable differences in financial attitudes across generations. Younger consumers, particularly those in Generation Z aged between 18 and 28, as well as Millennials aged 29 to 44, display the highest levels of optimism about their financial prospects. These groups are also the most inclined to consider applying for new credit in the coming year, with 42 percent of Generation Z and 39 percent of Millennials indicating such intentions.
This optimism is partly reflected in spending plans. Younger consumers are more likely to increase expenditure on digital services, including internet access, as well as discretionary categories such as dining out, entertainment and travel. These patterns suggest a greater willingness to balance enjoyment and lifestyle spending with financial commitments.
Older Generations Prioritise Caution and Security
In contrast, Generation X consumers aged 45 to 60 and Baby Boomers aged 61 and older demonstrate a more conservative financial stance. Only 33 percent of Generation X respondents and just 9 percent of Baby Boomers expect to apply for new credit. Instead, these age groups are focusing on reducing debt burdens and reinforcing savings.
As retirement approaches, lowering debt often becomes more critical than increasing income, as fixed earnings reduce financial flexibility.
Spending intentions among older consumers further reinforce this cautious approach. Many indicate that they will prioritise increasing retirement contributions and strengthening emergency savings rather than expanding discretionary spending. This reflects a heightened focus on financial security and long-term stability as they move closer to or further into retirement.
Uneven Access to Credit and Financial Inclusion Challenges
Credit continues to play an important role in enabling long-term financial mobility for South Africans. An overwhelming 91 percent of consumers recognise that access to credit is essential for achieving personal financial goals such as education, housing or asset acquisition. However, perceptions of access remain mixed, with only 42 percent believing that they have sufficient access to credit. Meanwhile, 33 percent feel that access is inadequate.
Despite the strong recognition of credit’s importance, only 36 percent of respondents plan to apply for new credit or refinance existing debt over the next 12 months. Among those who do intend to apply, credit cards are the most commonly considered product at 30 percent, followed closely by personal loans at 28 percent and vehicle finance at 20 percent.
Notably, 44 percent of consumers who initially considered applying for credit ultimately decided against doing so. The main reasons cited include high borrowing costs, concerns about potential rejection due to credit history, and worries related to income stability or employment security.
Checking a credit report before applying can reduce rejection risk and help consumers address issues proactively.
These findings point to persistent barriers within the credit market and highlight the importance of more inclusive and transparent lending practices. The study suggests that broader use of alternative data, such as rental payment records or buy-now-pay-later histories, could help responsibly extend credit access while supporting fairer lending decisions.
Rising Digital Fraud Drives Demand for Simpler Protection
High Exposure to Scams and Fraud Attempts
Digital fraud remains a significant concern for South African consumers. During the fourth quarter of 2025, 59 percent reported being targeted by some form of fraud, while 12 percent confirmed that they had fallen victim. The most frequently reported scams include money or gift card fraud, voice phishing, traditional phishing and smishing.
Despite the high level of exposure, consumer vigilance appears to be improving. Around 46 percent of respondents indicated that they were able to recognise and avoid fraudulent attempts, suggesting greater awareness of common scam tactics.
Mixed Responses to Data Breaches and Security Risks
Among consumers affected by data breaches, responses varied. Many changed their passwords, reviewed their accounts for unauthorised activity or closed compromised accounts, although relatively few signed up for identity monitoring services.
In the two months prior to the survey, many consumers took precautionary actions in response to growing security concerns. At the same time, a significant portion of consumers remained unsure how to respond effectively, often citing confusion or information overload.
Growing Financial Awareness and Credit Engagement
Financial awareness among South Africans continues to strengthen, with 93 percent acknowledging the importance of monitoring their credit profiles. Engagement with credit reports is also increasing steadily, with a growing share of consumers checking their credit health regularly.
Early detection of credit errors can prevent long-term damage to borrowing ability.
There is also growing interest in how alternative data could influence credit scores. Nearly half of respondents believe their credit standing would improve if additional information such as rental payments or buy-now-pay-later activity were included in assessments, particularly among younger consumers.
This rising awareness signals a shift towards more proactive financial behaviour. Consumers are increasingly informed, engaged and willing to take responsibility for their credit health.
Confidence Rooted in Resilience and Forward Planning
Overall, the Q4 2025 findings present a picture of a population adapting with intention. South Africans are navigating affordability pressures with a balanced mindset that combines caution with confidence. Long-term planning, financial inclusion and protection against risk are becoming central to how consumers interact with the financial system.
Resilience has emerged as a defining characteristic of South African consumers. Rather than waiting for economic conditions to improve, households are actively taking steps to manage their finances more effectively, reinforcing the idea that financial confidence and caution can coexist as the country moves into 2026.
Conclusion
The findings suggest that South African consumers are responding to persistent economic pressures with greater discipline and intention, rather than financial fatigue. By tightening budgets, improving financial literacy and prioritising debt reduction alongside long-term planning, households are laying the foundation for more sustainable financial health. This growing emphasis on informed and proactive money management indicates a maturing consumer mindset, one that balances present-day constraints with future resilience and stability.
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