Households across South Africa continue to grapple with considerable financial pressure, as almost four out of every ten consumers (39%) anticipate falling behind on at least one bill or loan repayment, according to TransUnion’s Q2 2026 Consumer Pulse Study (CPS). Stubbornly elevated inflation continues to alter the way households spend, borrow and save, prompting more guarded financial conduct amid a landscape defined less by genuine recovery and more by ongoing recalibration. Ayesha Hatea, director of research and consulting at TransUnion South Africa, explained that consumers are still coping for now, although the room for error continues to shrink, with even small rises in essential costs forcing difficult trade-offs.
Key Takeaways
- Affordability is the core strain: Nearly four in ten South Africans expect to miss at least one bill or loan repayment, as rising essential costs continue to outpace income growth for most households.
- Consumers are cutting back, not collapsing: Over half have reduced discretionary spending and many are paying down debt faster or building emergency savings, though a smaller group is dipping into credit or retirement funds instead, showing uneven resilience across the population.
- Credit appetite is cautious, not absent: Most consumers still see credit as important and believe they could be approved, yet cost concerns are driving many to abandon applications, with demand shifting towards shorter-term, more flexible products like personal loans and BNPL.
Financial Pressure Persists As Optimism Declines
Household finances remain constrained, with a mixed set of indicators pointing towards ongoing difficulty rather than any decisive improvement. During the second quarter of 2026, 43% of South Africans reported that their household finances were performing better than they had anticipated, a marginal decrease from 44% recorded in the same quarter of 2025. Simultaneously, 40% indicated that their finances had turned out worse than expected, reinforcing the sense of continued strain rather than a definitive recovery.
Sentiment about the future weakened even more sharply than current conditions. Financial optimism fell to 66%, down from 71% a year earlier in Q2 2025, whilst the share of consumers expressing pessimism climbed to 19% from a previous 15%. Expectations around income also softened, with 70% of consumers now anticipating a rise in household income over the coming twelve months, compared with 75% who held that view a year prior.
One of the principal forces behind this shift is the growing divide between the pace of income growth and the pace at which the cost of living is climbing. Just 37% of consumers felt that their income was keeping pace with inflation, whereas 41% took the opposite view. Rising costs for everyday essentials, such as groceries and fuel, remained the leading concern for households, featuring among the top three worries for 79% of those surveyed.
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How This Imbalance Is Affecting Household Cash Flow
This growing gap between earnings and expenses is having a mounting effect on liquidity, highlighting just how significantly cost pressures continue to weigh on monthly cash flow and heighten the likelihood of missed payments.
Consumers concerned about liquidity gaps can request a free copy of their credit report from registered bureaux to check for errors or outdated information, since inaccuracies can sometimes worsen perceived risk and affect access to affordable credit.
Hatea noted that inflation remains the foremost source of pressure on households at present. She observed that even in cases where earnings are climbing, the cost of essentials swiftly absorbs whatever relief that additional income might have offered. As a result, she said, budgeting discipline and financial awareness have become more important than ever, since households need clarity on exactly where adjustments can be made whenever pressure intensifies.
Households Cut Discretionary Spending to Stay Afloat
As a consequence, South Africans are making tangible changes to how they manage their household budgets. Just over half of consumers (53%) said they had reduced discretionary spending, including areas such as dining out, travel and entertainment, over the preceding three months. An additional 28% said they had cancelled subscriptions or memberships, while 24% had cancelled or scaled back digital services such as mobile data, cable television or internet connectivity.
Streaming and subscription services are consistently among the first expenses cut during periods of financial strain worldwide, largely because they can be cancelled instantly without penalty, unlike fixed contracts such as insurance or gym memberships.
Patterns around debt repayment and savings likewise reflect a more cautious approach. The study found that:
- 32% of consumers said they had paid down debt at a faster rate than usual.
- 27% said they had increased contributions to an emergency fund or a stokvel.
- 20% said they had increased savings earmarked for retirement.
- 14% said they had reduced their retirement savings contributions instead.
- 14% said they had increased their reliance on available credit.
- 13% said they had drawn on their retirement savings to get by.
This spread of behaviours signals that financial resilience is far from uniform across the population, and for a portion of consumers, it appears to be eroding further.
What Consumers Expect To Spend On Over The Next Three Months
Looking ahead, consumers anticipate that pressure on essential spending categories will persist. Over the next three months:
| Spending Category | Consumers Expecting An Increase |
|---|---|
| Bills and loan repayments | 37% |
| Medical care and services | 33% |
| Retirement fund or investment contributions | 36% (with 16% expecting a decrease) |
Hatea remarked that these figures illustrate just how carefully households are attempting to balance competing priorities. She pointed out that while some consumers are still managing to build financial buffers and reduce their debt, others are being forced to rely on savings or credit simply to make it through the month, which is why the overall picture reflects ongoing financial adjustment rather than a straightforward improvement.
Consumers Want Credit But Few Are Willing To Apply
Credit continues to serve as an essential financial tool, although consumers are becoming noticeably more selective in how they engage with it. The study revealed that 92% of South Africans regard access to credit and lending products as important to reaching their financial goals, a figure that has remained unchanged from the previous year. Perceptions around the availability of credit improved somewhat, with 45% of consumers now believing they have adequate access, up from 38% recorded in Q2 2025. Roughly half of consumers (50%) believe that they would be approved if they were to submit an application.
Even so, this growing confidence has not translated into higher demand for new credit. Only 36% of consumers intend to apply for new credit or refinance existing credit obligations over the next twelve months, a figure that has stayed broadly consistent year over year. Among those who had at some point considered applying for credit or refinancing, 45% ultimately decided against following through.
“Buy now, pay later” (BNPL) products have grown rapidly worldwide because they typically involve no interest if repaid on time, but missed instalments can still be reported to credit bureaux in some markets, so treating them with the same discipline as traditional credit is worthwhile.
Why Consumers Are Abandoning Credit Applications
Cost remains the single largest deterrent, cited by 30% of consumers who abandoned their applications. Credit history was named by 23% of respondents, whilst 22% pointed to concerns around income or employment status. These figures suggest that, although consumers continue to acknowledge the value of credit, a considerable number remain wary of taking on further financial obligations.
Hatea observed that demand for credit has not vanished altogether, but that consumers are becoming more discerning about the commitments they are prepared to take on. She noted that for many households, the question of access extends beyond simple availability, and also involves whether the associated cost, repayment terms and approval process feel genuinely manageable.
Where consumers do intend to pursue new credit, demand is tilting towards products that are shorter in term and more flexible in structure. Among those planning to apply for new credit or to refinance:
- 34% intend to apply for a new personal loan, an increase on the previous quarter.
- 29% plan to apply for a new credit card.
- 27% plan to make use of buy now, pay later services.
Fraud Exposure Rising As Digital Use Expands
Digital channels are also assuming a growing role in how consumers participate in the financial system. Among the 30% of consumers who said they made use of digital banking services, approximately 46% reported using a digital bank, 56% had used buy now, pay later services, and 23% had engaged with digital or FinTech providers. This points to sustained demand for speed and convenience, alongside a continued need for clear and responsible information around credit.
As digital financial activity continues to expand, protecting one’s identity remains a pressing concern. Around 56% of consumers reported being targeted by fraud attempts conducted online, or via email, phone calls or text messages, within the preceding three months.
Common Fraud Tactics Reported By Consumers
Among those who were targeted, the most frequently reported schemes were:
- Vishing (voice call phishing) – 34%
- Smishing (SMS-based phishing) – 33%
- Phishing (email-based fraud) – 31%
A useful rule of thumb is that legitimate banks and financial institutions will never ask for a full password, PIN or one-time PIN (OTP) over the phone, by SMS or by email, so any such request should be treated as a red flag.
The study also established that 26% of consumers had been informed within the past three months that details relating to their identity or online accounts had been exposed in a data breach.
Steps Consumers Are Taking To Protect Themselves
Consumers are, encouragingly, taking a number of protective measures. Within the preceding sixty days:
- 53% changed their passwords due to concerns around cybersecurity.
- 37% checked their credit reports.
- 12% purchased internet security, anti-virus or anti-malware protection.
Nonetheless, uncertainty continues to stand in the way of action for some. Among consumers who took no protective steps despite holding cybersecurity concerns, 56% said they felt overwhelmed by not knowing where to begin.
Hatea explained that as digital financial participation continues to grow, security is becoming a core component of overall financial confidence. She said that consumers require clear, practical guidance on how to protect their personal information and how to respond effectively whenever risks arise.
Consumers Seek Control Amid Ongoing Financial Strain
Despite the challenges outlined throughout the study, South African consumers remain financially engaged and proactive. Around 34% check their credit reports on a monthly basis, 13% do so weekly, and 6% check theirs on a daily basis. More than half of consumers (52%) believe that their credit score would improve if businesses incorporated information not typically captured on standard credit reports, such as rental payment history, short-term loan repayment records, and buy now, pay later loan activity.
This growing appetite reflects a broader shift towards financial visibility, with consumers actively seeking out tools and information that can help them manage their financial position more effectively amid an uncertain economic environment.
A Market That Remains Resilient Yet Increasingly Constrained
The Q2 2026 Consumer Pulse Study points to a market that remains resilient, yet is increasingly constrained. Households are adjusting their spending patterns, managing debt with greater care, and actively seeking more control over their finances, although persistent cost pressures continue to test their capacity to absorb further shocks.
Hatea concluded that consumers are doing everything within their power to remain in control amid a genuinely difficult environment. She added that for lenders and financial service providers, the real opportunity lies in supporting that effort, through transparent pricing, responsible access to credit, and tools that help consumers anticipate and manage financial stress before it has the chance to escalate.
Conclusion
The Q2 2026 Consumer Pulse Study makes clear that South African households are not in freefall, but they are operating with far less breathing room than before, carefully weighing every spending, saving and borrowing decision as inflation continues to erode the value of their income. Consumers are showing real financial discipline, cutting back on non-essentials, protecting themselves against rising fraud risks, and seeking out greater visibility into their credit standing, yet the underlying pressure has not eased. For lenders and financial service providers, this presents a clear opportunity to build trust through transparent pricing and responsible lending practices, helping consumers manage financial stress before it escalates into missed payments or deeper debt.
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