What you need to earn to be considered middle class in South Africa.

What you need to earn to be considered middle class in South Africa. Image: Pixabay.

Understanding the middle-class income bracket in South Africa

Determining the criteria for being labelled as ‘middle class’ in South Africa is difficult due to the notable gap.

What you need to earn to be considered middle class in South Africa.

What you need to earn to be considered middle class in South Africa. Image: Pixabay.

Determining the criteria for being labelled as ‘middle class’ in South Africa is difficult due to the notable gap between the affluent and the less privileged segments of society.

Middle class income bracket in South Africa

There is no formal definition for the middle class, primarily because establishing who belongs to this group is complex, requiring consideration within the broader population context. 

With a staggering unemployment rate of 32.9% in the initial quarter of this year, even individuals earning as little as R1 per month from employment are included in the 16.2 million employed individuals.

According to BusinessTech, Stats SA reports that the average monthly wage in South Africa’s formal sector, commonly seen as a gauge of the middle class, is currently R26 894. 

According to the latest figures from the statistical agency’s quarterly employment survey, this represents a 1.6% rise from around R26 500 in the third quarter of 2023.

Compared to the same quarter in 2022, when it stood at R26 300, this new average reflects a 2.3% increase.

Alternative research entities, like the University of Cape Town’s Liberty Institute of Strategic Marketing, suggest that households earning around R22 000 per month are considered middle class. 

 In their recent Credit Stress Report, the research and analytics firm Eighty20 defines middle-class individuals as those within households earning close to R25 000 monthly, with a personal income of R15 000. 

According to the report, this demographic encompasses 4.1 million credit-active individuals with families, mortgages, and regular shopping habits.

Discovery Bank has broadened this scope, indicating in its SpendTrend 2024 report that middle-income individuals, termed “mass affluent,” earn between R100 000 and R350 000 annually.

This translates to a monthly income from R8 000 to R29 000, aligning with the South African Reserve Bank’s (SARB) estimated range for the country’s middle class.

Combining insights from various sources, the middle class in South Africa can be those earning an average income of slightly above R20 000 per month.

Rising divorce rates with children: Emphasising financial readiness

Recent data from Statistics SA indicates a significant increase of 10.9% in divorce cases over the past year, with 55.3% of these cases involving minor children. 

Sebastien Alexanderson, Head of National Debt Advisors, underscores the crucial need for cultivating financial autonomy within marriages and provides actionable advice to achieve this goal.

Based on the most recent report by Statistics SA, divorces have surged by 10.9%, with 55.3% of these cases involving minor children, affecting around 18 850 children in the past year. 

 This underscores the profound impact of divorce on families, particularly women and children, underscoring the necessity of financial foresight. 

Sebastien Alexanderson, Head of National Debt Advisors, emphasises that economic security planning within a marriage should be as natural as preparing for retirement or obtaining life insurance.

 “Considering that 42% of divorces occur within the first nine years of marriage, a solid plan is imperative.”

He emphasised that grasping the intricacies of your marriage contract is a pivotal initial step toward attaining financial autonomy. 

Alexanderson pointed out that the Statistics SA reports highlight a crucial fact: most divorces (87% of men and 88% of women) occurred in first marriages. 

This underscores the significance of understanding marriage contracts, which dictate the division of assets and debts, profoundly influencing the financial prospects of both parties.

Alexanderson further stressed that fostering financial independence within marriage entails maintaining individual bank accounts, establishing personal credit profiles, and ensuring that assets such as vehicles are registered under each partner’s name. 

 “This goes beyond mere divorce preparation; it’s about fostering financial empowerment and stability within the marital union,” emphasised Alexanderson.

Alexanderson offered the following tips for financial empowerment in marriage:

  1. Review Your Marriage Contract Thoroughly: Understand the terms of your marriage contract (community of property, with or without accrual) as it impacts your financial rights in divorce.
  2. Establish and Maintain Separate Finances: Maintain personal financial accounts and build an independent credit history to ensure financial autonomy.
  3. Engage in Regular Financial Discussions: Regularly discuss finances with your spouse for transparency and joint decision-making.
  4. Plan Financially for All Scenarios: Plan for financial independence, especially for stay-at-home parents, through personal savings or investments in your name.

“Financial empowerment in marriage is about more than just managing finances—it’s about laying a strong foundation of stability and independence that provides peace of mind and confidence in any circumstance. It’s about fostering a sense of security and autonomy within the partnership, ensuring a solid footing for both individuals, regardless of what the future may hold,” said Alexanderson.