As the budget speech approaches, one thing is clear; debt is both an individual and national concern.
Although inflation has tapered to the lowest rate in decades, income increases have been nominal, and the cost of living has risen dramatically. Over the past decade, electricity tariffs increased by 165%, petrol by 74%, and inflation’s compounded impact is 49%.
The DebtBusters Q4 2025 Debt Index shows that those who applied for debt counselling within the quarter needed 71% of their take-home pay to service their debt; the highest level recorded since 2017.
According to the National Credit Regulator (NCR), from 2016 to 2025, South Africans’ total debt amount (known as the gross debtors book) increased from R1.65 trillion to R2.44 trillion. Over the same period, South Africa’s government debt has risen from R2.15 trillion in 2015/16 to an estimated R6 trillion by the end of the 2025/26 financial year.
Benay Sager, executive head of DebtBusters, says that both government and consumers can benefit by dealing with their debt decisively.
READ – South Africans Drowning in Debt Despite Stable Rates
Sager says the DebtBusters wish list for the 2026 budget is:
Increase tax-free thresholds and reduce tax bracket creep. There has been no change to the tax tables over the past few years. Amending the brackets would provide consumers with more disposable income, allowing them to keep more of their earnings and manage their debt repayments more effectively. It would also free up money for saving or an emergency fund, particularly if incentivised by a tax-free savings allowance.
Slow down the increase in electricity and fuel tariffs. Although the government does not directly set electricity prices, accelerating electricity and Eskom unbundling reforms could create an environment in which electricity supply is more abundant, limiting price increases or seeing prices fall.
Maintaining or decreasing the fuel levies would benefit all households. It would also help to contain inflation. Although the CPI was 3.2% for 2025, lower-income households feel the effect 2% to 4% more. Both electricity and fuel are input costs, and both have been rising faster than the CPI. Addressing some of the structural issues that contribute to inflation would benefit poorer consumers the most.
Pay down government debt and restructure existing debt. This would free up public resources, reduce borrowing costs, stabilise prices, and promote economic growth, all of which directly improve the financial well-being of South Africans.
According to educational psychologist Andrea Kellerman, the benefits of implementing these suggestions would extend beyond reducing financial pressure on South Africans.
“Financial pressure creates chronic, invisible stress. It’s not the same as everyday stress, but ongoing background stress that lives in the nervous system. When people don’t feel financially safe, the brain stays in threat mode. This shows up as anxiety, fatigue, irritability, low mood, and a constant sense of being overwhelmed.”
In addition to affecting home life and causing tension in relationships, Kellerman says, this stress negatively impacts the economy, manifesting in productivity drops and people not seeking long-term opportunities.
The wish list for consumers, Sager says, is similar to the budget list:
Reduce expenses. Account for all expenses, set a target to reduce them by a certain percentage (say, 5%) and draw up a monthly budget to achieve this. Wherever possible, use retailers’ cash-back programmes to save on essentials and take advantage of rewards offerings. Use programmes such as MyMoney Saver, which is available to DebtBusters online subscribers.
Taking a first step, even if small, immediately lowers anxiety and restores a sense of agency and control, Kellerman says. However, many people fail to act because they feel overwhelmed.
“Avoidance often isn’t laziness; it can be a stress response.”
READ – High Earners now Among Most Indebted
Tackle debt. Use any spare income to repay the highest-interest-rate debt first, or get help to restructure debt. Debt counselling can reduce unsecured debt interest rates substantially – on average, from 21.9% to ~2.6% per annum.
The psychological benefit of taking this action, Kellerman says, is a shift from survival mode back into problem-solving mode.
“Getting help isn’t just about money – it’s about restoring emotional safety. When people feel supported, they’re far more able to make sustainable decisions and rebuild their financial lives,” she concludes.