Not surprisingly, the vast majority of South Africans, of all ages and across most income groups, are very worried about their finances and futures right now. While much hasbeen said about the impact of Covid-19 on people’s employment, there has been less focus on the potentially devastating impact of the pandemic on seniors, particularly those approaching retirementage.
Apart from the fact that the health risks of the coronavirus are amplified for older people, the economic
fallout of Covid-19 and the national lockdown response has made many people who are at or near
retirement feel particularly vulnerable.
Sisandile Cikido, Head of Savings and Investments for Nedbank,points out that while these financial
concerns among more senior South Africans are understandable, getting back on track with their saving
and investing is one concrete step they can, and should, take to help future-proof their finances.
‘With the prime interest rate at a record low of 7%, and many people over 55 having either lost their jobs
or watched their retirement nest eggs drop in value in 2020, it’s not hard to see why many South African
seniors are feeling uncertain about the value of saving,’Cikido says.‘But a lower–interest–rate
environment definitely doesn’t make it any less important to save money now, and in the future.’
Cikido says that at the peak of the pandemic and lockdown in South Africa, Nedbank noticed a spike in
the number of its senior clients who were accessing their savings. While this was undoubtedly necessary
to cope financially with the challenges of the lockdown, sheemphasises that it is now very important,
especially for over-55s, to reverse this trend and get back on track with their savings as quickly as
possible – preferably with a long-term focus.
The wisdom of this advice is evident when you consider the valuable buffer that savings accounts
provided for South Africans who had them during lockdown. The ability their savings gave them to cope
with weeks and months of lower income offers an important lesson on the imperative to keep on saving,
even when lower interest rates make the growth prospects a little less appealing for now.
‘A healthy savings balance provides a potentially life-saving buffer against the impact of any future crises
or emergencies,’Cikido explains.‘And a good fixed-term savings account still offers reasonable long-term
rates to help you build up a cash balance that will stand you in good stead – whether in a crisis or in
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