Survey Shows Low Future Savings Trend

June 26 - A recent survey commissioned by the Avusa "Gauteng Wealth" market research showed that the number of South Africans who are truly covered for the unexpected through future savings is dismally low.

The survey showed that only when people reached their mid thirties or forties did they suddenly realize just how under insured they were and started to make plans to provide for their futures. This trend, surprisingly, is also evident in wealthier income brackets.

According to the survey, only one in five South African citizens has full medical coverage, while those who took out some form of future savings retirement coverage went about it inadequately.

Speaking about the trend that leaves those nearing mid-life age to suddenly consider their options, the product market manager for Momentum Wealth, Maria Claasen said: "It's a progressive journey and as they gain and accumulate more wealth, the initial tendency is to enjoy that wealth and the fruits of their labor. Retirement provisions comes only after they have secured these home comforts. Only when they reach about 35 or their early forties, do people really start thinking seriously about retirement."

A positive finding in the survey showed, however, that a sound percentage of those in the upper income brackets consult with a financial advisor or broker regarding their portfolios and savings plans. 56% of those who took part in the survey said that they consult with an insurance broker, while a third had a personal financial advisor.

The survey showed that the majority of respondents used savings or transmission accounts as a savings platform, while 30% using check accounts. Less than a third of respondents - 29% - said that they had life insurance, while only 19% had some type of medical scheme.

Industry experts say that many South Africans preferred to invest their money in the meteoric property industry over the past years. However, with the market in a slump, and growing interest rates, it is believed that South Africans will now prefer to invest their money in retirement plans and other schemes instead.