ABSA has welcomed the Labour Department's plans to promote retirement savings among vulnerable workers.
Johan Gouws, executive director at Absa Investments, says the move will allow more South Africans to take control of their financial affairs and create a suitable savings vehicle for low salary workers.
Labour Minister Mildred Oliphant recently announced that her department was looking at ways to promote retirement savings among farming and domestic workers. An investigation is under way to determine the feasibility of such a savings vehicle.
Gouws believes this plan is a step in the right direction and will aid in addressing South Africa's poor record for saving.
"The latest statistics indicate that South African households have an almost zero percent savings rate. In some cases this is due to financial illiteracy as well as an inability to save due to the increased cost of living.
This has also left the country exposed and dependent on international investment flows in order to balance the financial books of government," said Gouws.
Gouws, however, remains confident that government's initiative is feasible, but would require various elements to support it.
"There needs to be a drive to improve financial literacy, and to improve the accessibility of the savings solution to the target population," added Gouws.
He also suggested providing employers with appropriate incentives to make additional contributions to aid workers as well as supporting workers with easy access to information regarding their savings.
The biggest obstacle, however, is for workers to overcome the hurdle of having sufficient money at the end of the month to start saving. Gouws suggests drawing up a budget in order to start saving.
"Start with a personal objective about your financial future and draw up a very basic schedule of your income and expenses to find surplus money to save. Investing in one's own financial future should be high on people's priority list from as early as possible during the income generating years," Gouws said.
Absa backs effort to boost saving culture
ABSA has welcomed the Labour Department's plans to promote retirement savings among vulnerable workers.
Johan Gouws, executive director at Absa Investments, says the move will allow more South Africans to take control of their financial affairs and create a suitable savings vehicle for low salary workers.
Labour Minister Mildred Oliphant recently announced that her department was looking at ways to promote retirement savings among farming and domestic workers. An investigation is under way to determine the feasibility of such a savings vehicle.
Gouws believes this plan is a step in the right direction and will aid in addressing South Africa's poor record for saving.
"The latest statistics indicate that South African households have an almost zero percent savings rate. In some cases this is due to financial illiteracy as well as an inability to save due to the increased cost of living.
This has also left the country exposed and dependent on international investment flows in order to balance the financial books of government," said Gouws.
Gouws, however, remains confident that government's initiative is feasible, but would require various elements to support it.
"There needs to be a drive to improve financial literacy, and to improve the accessibility of the savings solution to the target population," added Gouws.
He also suggested providing employers with appropriate incentives to make additional contributions to aid workers as well as supporting workers with easy access to information regarding their savings.
The biggest obstacle, however, is for workers to overcome the hurdle of having sufficient money at the end of the month to start saving. Gouws suggests drawing up a budget in order to start saving.
"Start with a personal objective about your financial future and draw up a very basic schedule of your income and expenses to find surplus money to save. Investing in one's own financial future should be high on people's priority list from as early as possible during the income generating years," Gouws said.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos