One group of South Africans in deep financial trouble

South Africa’s Millennials are in deep financial trouble, with new research revealing that they are the most debt-stressed generation in the country. 

This is according to Sanlam Credit Solutions’ 2025 Credit Confidence Index, which is based on data from more than 818,000 active users.

The data showed a notable generational divide in how South Africans handle debt and engage with credit. Financial pressures and the rising cost of living affect all age groups. 

However,  Millennials (born between 1981 and 1996) are showing the highest levels of financial strain, with more than half currently considered high credit risks.

“Millennials are carrying the weight of unsecured credit, rising living costs, and delayed asset acquisition like home ownership,” said Afua Darko, Head of Business at Sanlam Credit Solutions. 

“The encouraging sign is that this group is actively seeking support. They’re not shying away from their financial reality.”

According to the report, over 165,000 Millennials are spending more than 50% of their monthly income on servicing debt.

This indicates that this group of South Africans are struggling each month. Data from the VeriCred Credit Bureau supports this, showing that many in this group have turned to debt counselling services in growing numbers. 

In fact, 56% of Millennials under financial strain have contacted Sanlam Credit coaches in recent months for help.

However, despite this overwhelming debt load, a contributing factor to their financial situation is that very few Millennials use credit to build long-term wealth. 

Only 17% currently have home loans, highlighting how asset acquisition is either being delayed or remains out of reach altogether. Darko said this suggested many are using credit to survive, rather than to invest in their future.

“Understanding these generational patterns is key to empowering South Africans across all generations to achieve credit confidence,” she explained.

In April 2025, Statistics South Africa reported that 26,000 individuals appeared in court due to bad debt.

The best performing generation  

This surge in defaults is being driven by a combination of high interest rates, a stagnant economy, rising petrol prices, and increasing food costs. 

But Sanlam believes that much of this distress can be avoided with proper financial education and the right tools.

“Financial confidence starts with knowledge and is built through consistent, informed action. We’re committed to supporting all South Africans on that journey.”

The Credit Confidence Index also highlights how other generations are faring. Generation X (those born between 1965 and 1980) also faces elevated levels of credit risk but tends to be more resistant to interventions like debt counselling. 

The report suggested this may stem from older attitudes toward seeking help and persistent gaps in financial education.

By contrast, Generation Z (born between 1997 and 2012) is emerging as the most financially optimistic generation. 

Although Gen Z is still relatively new to credit markets, its risk levels remain low, with only 4% spending more than half of their income on debt. 

Gen Z is also proving to be the most open to learning, with a strong appetite for financial education and digital tools that help it build credit responsibly.

“Gen Z is demonstrating a remarkable willingness to learn. They’re leveraging digital tools, engaging in money conversations early, and showing real promise when building credit confidence,” said Darko. 

“We’re seeing the early signs of a generation that could change the trajectory of South Africa’s credit culture.”