Ninety-one percent of working South Africans aged 18 to 29 have set savings goals. Almost none of them can meet those goals comfortably. That gap, between aspiration and daily financial survival, is the defining economic reality for a generation of young citizens, according to new research by Old Mutual released ahead of national savings month in July.
The numbers are stark. Only 46% of surveyed Gen Z workers save regularly, a decline of 11 percentage points from 2025. More than half (56%) have withdrawn money from their savings to cover basic living expenses, a 10% increase year-on-year. The share reporting financial stress has climbed to 36%, up from 29% in 2025. One in five young people have turned to loans just to meet everyday costs.
Rising living costs, debt obligations, and family responsibilities are the primary drivers. Nearly 43% of Gen Z respondents belong to what researchers call the “sandwich generation,” meaning they are financially supporting both younger relatives and aging family members at the same time. Income growth has stalled: only 51% of young workers earned more in 2026 than they did a year earlier, compared with 55% in 2025.
Building an emergency fund ranks among the top five financial priorities for these young people. The economic pressure bearing down on them makes that goal increasingly difficult to reach.
“Generation Z is often seen as financially impulsive, but our research reveals a more complex picture,” said John Manyike, Old Mutual group head of financial education. “Young South Africans understand why saving and planning matter. However, ongoing economic pressure is leading many to prioritise today’s needs over tomorrow’s goals.”
The challenge extends well beyond Gen Z. South African consumers across the income spectrum are being forced to prioritize short-term financial survival over long-term security as living costs climb. The national saving rate ticked up slightly to 14.9% of gross domestic product in the first quarter of 2026, compared with 13.3% in the fourth quarter of 2025, but analysts expect that figure to decline in the second quarter as the cost of living continues its upward march.
Frikkie van Loggerenberg, chief executive of Ifsa Asset Managers, points to a deeper structural problem. “For South Africans in general, there is a bit of a lack of a savings culture. Everybody tries, but there’s not that 100% commitment to get to that point, and there’s not enough focus or commitment to retirement planning,” he told Business Day. “On the other hand, there is this economic pressure where things are getting more and more expensive each day, and people are battling. The income is battling to keep abreast with inflation.”
Most households maintain a savings account for emergencies, but longer-term retirement planning remains underdeveloped. That gap between emergency savings and retirement readiness has grown more acute since the introduction of the two-pot retirement system in September 2024, which allows workers limited access to their retirement savings during financial hardship.
The government and supporters of the system argue it has prevented workers in distress from resigning simply to access their entire retirement pot, while preserving the bulk of those funds until actual retirement. By the end of February 2026, the South African Revenue Service had approved R79.3 billion for withdrawal from savings pots, with 5.6 million people applying for tax directives.
Van Loggerenberg remains skeptical of the long-term consequences for ordinary citizens. “On the research that we’ve done, if you have access to that savings pot, each and every year you will use that up. It’s a fact of life, and you get into that routine to do it. So that makes a huge impact on your long-term retirement savings that the money is there for,” he said. “I don’t think it was a good decision. I think that retirement money should stay retirement money and you should not have access to that till the day that you actually retire.”
The human cost of inadequate retirement savings is already visible. According to 10X Investments’ 2023/24 retirement reality report, only about 6% of South Africans are on track to retire comfortably. The rest either continue working into old age or depend on their children for financial support, perpetuating a cycle of intergenerational financial strain that Van Loggerenberg believes the country must break.
Whether the two-pot system ultimately eases that burden or deepens it will depend on choices millions of South Africans make, year after year, under conditions that leave little room for long-term thinking.