Financial products used by South African households at different life stages

Abstract

South African households don’t save enough to ensure financial freedom after retirement. This article poses the following question: do life stages have a significant impact on the financial products used by households? The question is asked in order to identify possible interventions that could increase financial freedom. This study found that life stages have a significant impact on South African households’ selection of financial products. The use of financial products for each of the levels of the financial product usage hierarchy increases as the age of the household head increases and when the size of the family increases, the only exception being single-parent families. The study indicated that financial literacy programmes should focus on young couples and young families, as there is a notable increase in their financial product usage. The study also found a very low usage of wealth management products by South African households and suggests that policymakers consider the introduction of an incentive to increase household’s usage of these products.