MORE than 50% of South Africans feel that saving for education is more important than saving for retirement, an Old Mutual survey reveals .

The Old Mutual Savings and Investment Monitor, which was presented yesterday in Sandton, showed people had begun to heed calls to rein in their short-term debt and curb spending.

But the survey showed that one in two working metropolitan South Africans did not contribute to a pension or provident fund nor did they have a retirement annuity.

The survey is a biannual study of 1000 working metropolitan households in South Africa and shows clear trends in savings patterns and behaviour.

The latest statistics showed 40% of South Africans were saving less than they were a year ago but there was a decrease of 8% in credit card ownership.

It also found that:

• 40% were saving less than six months ago;
• 88% are affected by the recession - up from 82% six months ago;
• 75% saved before buying, rather than buying on credit; and
• 36% of black respondents belonged to a stokvel - a significant decline from July last year.

But stokvels were still a major economic force worth about R38.6-billion a year.

"These results indicate an increase in the number of people spending less and a concomitant increase in cost-cutting.

Overall, we are coping better because we're more careful with managing our finances and we're more willing to cut back on luxuries," Old Mutual chief researcher Lynette Nicholson said.

"But the number of South Africans who are saving less has also increased. So more people are making a plan and being more careful, pragmatic and less 'spooked' about their finances. It seems that cutting expenses and getting rid of short-term debt takes priority ahead of saving."

She said the findings indicated people were less likely to spend on credit this festive season than previous years.

The number of people with personal loans has declined from 19% to 11%.

The study has also shown that about 36% of black respondents belonged to stokvels, contributing an average of R520 a month.

"Apart from quick access to money for emergencies such as school-fees and uniforms, and paying off debt, stokvels also attract members because they're trusted and flexible."

"There is a great dependency on the government to provide for respondents in their old age.

"One in two South Africans believes that they will rely on the government and-or their children in the future," Nicholson said.