Measures to improve household savings in South Africa.

Thesis (MBA)-University of KwaZulu-Natal, 2011.The level of savings in South Africa has been described as dismal and on the verge of becoming an economic crisis. Household savings has declined to a level of dissavingand is therefore in need of rectification. Savings can be broken down into household, corporate and government saving. The purpose of this research is to identify measures to improve household savings in South Africa. A critical review of household savings is conducted in chapter two utilising secondary data to examine household savings, identify factors affecting savings as well as establish measures to improve household savings. The study gathers primary data from 10leading economists and financial experts located in South Africa.A qualitative study is undertaken as it helps provide intrinsic information on the thoughts and opinions of the sample group on measures to improve household savings. The research has revealed that South African households are not saving sufficiently and that there are a few key factors affecting households savings. The key factors are indentified and investigated in the literature review and further examined by the respondents for their expert opinions. The respondents have identified thathousehold savings behaviours are insufficiently contributing to savings and there is a lack of a savings culture to encourage positive savings growth. Consumers are caught up in a web of consumerism with easy access to credit as a result of financial liberalisation. These two factors have created a debt trend and left many households in a downward spiral of debt. The respondents have identified the main factors affecting households as: savings culture,financial literacy, consumerism, income levels, education and interest rates. Measures identified to improve household savings are: Tax breaks, government incentives to saving, education, budgeting as well as developing a national culture of saving. These suggestions help outline a path for government, corporations and individuals to follow in achieving greater household savings. The research has outlined measures to improve household savings and stressed that there is no one single measure to rectify the savings dilemma, but rather it is to identify and acknowledge that the savings solution lies in addressing each of the factors affecting saving with a view to improving saving as a whole.No print copy submitted to library