Vimal Chagan


South Africa's challenge: saving

South Africa’s savings rate is one of the lowest in the world. We don’t save enough and consume above our means while the servicing of debt puts many in a precarious position.


In China, the government has an entirely different problem: motivating people to spend. The habit of preserving wealth is embedded in their DNA as, culturally, savings represent the foregoing of pleasure today for a future benefit.


In South Africa, however, when a person starts earning an income and has access to credit, there is a push for them to spend rather than save.


South Africans, particularly those in the 21-40 age group, thus find it difficult to put money away. Retirement feels like something to think about later in life, and the concept of saving is difficult to grasp. But spending habitually rather than saving becomes a habit that is difficult to break, and the sad reality is that many people will end up working well past retirement age.


It is important to get into the habit of saving first, and then looking at how to optimally invest those savings. Financial advisors can help the individual to gain a better understanding of what route to take in achieving their goals. There are various types of savings and investment products on the market, and these specialists can be invaluable in helping a person to plan their life journey.


Vimal Chagan, divisional executive for Savings and Investments at Liberty.