Banks and other financial institutions like to give the impression that South Africans are averse to saving.
But the real reason many South Africans can't save is due to the high cost of living. Calculations show that food prices have increased by 14percent from the beginning of this year. Petrol has also gone up and people are spending extra money on security because crime is out of control. No wonder people can't save for a rainy day.
The real reason people don't save, especially for their old age, is because they can't afford to. The little set aside goes towards buying necessities. They also don't save because they don't want the taxman to get an extra piece of their shrinking pie.
We should enforce saving by adding a compulsory pension plan on to yearly tax as they do in Chile. We should also provide incentives like scrapping tax on investments that run past a decade or more and on retirement annuities. Tax breaks should also be given to residents and businesses who pay extra for security, so that they have a little more money to invest.
We cannot expect the overburdened consumer to save money that they don't have, but we can however make the task easier and more attractive.
Brian Goodall, DA spokesman on economic affairs, Gauteng