New data shows that South Africans earning over R180,000 a year are accessing more credit but increasingly defaulting on their repayments, which is not sustainable.
This is according to the Eighty20’s latest Credit Stress Report, which highlighted that over‑indebtedness continued to increase in the fourth quarter of 2025.
The report showed that while higher-income earners continue to access large amounts of credit, defaults and overdue balances are rising across multiple income segments.
According to the report, over-indebtedness worsened in the final quarter of 2025, with several indicators pointing to growing pressure on household finances.
“A few metrics painted a worrying picture. These are the sustained rise in the number of defaulters and a steady accumulation of overdue balances, both of which appear to be accelerating rather than stabilising,” the report said.
While credit uptake typically rises in the fourth quarter due to seasonal spending, the latest data suggested that the increase in borrowing is accompanied by worsening repayment behaviour.
Total open loans grew by more than one million during the quarter, rising 1.9% to 55 million nationwide.
At the same time, outstanding balances increased by R44 billion, up 1.7% to a total of R2.66 trillion.
However, the share of consumers falling behind on their payments also increased. The report found that 40% of credit-active South Africans are now in default—defined as being three or more months in arrears on at least one loan.
“The number of defaulters ticked up marginally, and the percentage of loans in arrears increased slightly, marking the first increase in this proportion since 2023 Q1,” the report noted.
Even more concerning is the rapid growth in overdue balances. The total value of overdue debt increased by R12 billion in the quarter alone (a 6% quarterly rise).
This also represented an increase of more than 12% year-on-year to reach R224 billion. Overdue balances now represent 8.4% of total outstanding debt.
Some income groups are in trouble
“This rapid growth is concerning and highlights widespread financial stress across segments, including what the report calls middle-class workers, heavy hitters, and even seniors,” Eighty20 said.
One of the key groups highlighted in the report is what it describes as “Middle Class Workers”.
Eighty20 describes this group as the roughly 4.1 million credit-active adults with an average personal income of about R15,000 per month (R180,000 annually) and household income between R8,000 and R30,000.
Credit usage among this group continues to grow. The number of credit-active middle-class workers increased by 2.5% quarter-on-quarter to 3.7 million individuals, collectively accounting for 13.1 million active loans.
Of the 1.4 million new loans taken out by this group in the quarter, 74% were personal loans. Personal loans now account for 25% of their total credit balances, while home loans make up 36%.
However, repayment stress is also rising in this segment. Overdue balances climbed 7.7% year-on-year to R88.2 billion, while 42% of individuals in the group now have at least one loan in default.
Higher-income earners—referred to in the report as “Heavy Hitters”—are also showing signs of growing financial pressure.
These consumers represent the top 5% of earners, with average personal incomes of around R42,000 per month (R504,000 annually), ranging from R30,000 to more than R120,000.
The number of credit-active heavy hitters increased by 7% year-on-year to reach 2.3 million individuals.
During the quarter, this group originated roughly 820,000 new loans, a 34% increase from the previous year.
Home loans make up the largest share of their debt burden, with outstanding home loan balances rising 7% year-on-year to R1 trillion. However, overdue balances are also climbing sharply.
The total value of overdue debt in this segment increased by 21% year-on-year to R59 billion, driven by increases of 25% in credit card arrears, 21% in home loan arrears, and 19% in personal loan arrears.
Older South Africans are also not immune to the trend. The report noted strong growth in the number of “Comfortable Retirees” who are actively using credit.
This group expanded by 10% year-on-year to reach 1.5 million individuals. During the quarter, they opened 233,000 new loans—a 35% annual increase.
Personal loans dominate borrowing among retirees, making up 70% of new loans in the quarter.
According to the report, this suggests that many retirees are using credit to cover everyday living costs rather than investing for the long term.
Across all income groups, the share of income going toward debt repayments remains significant.
In the fourth quarter, credit-active South Africans spent an average of 29% of their net income servicing debt.
The burden is particularly heavy for higher earners. Heavy hitters allocate 48% of their monthly income to instalments, while middle-class workers spend about 37%.
