According to TransUnion’s latest research, the number of consumers who have lost their jobs has increased sharply since the start of April, reflecting a direct relation to the start of the lockdown.
The research by TransUnion is conducted to better understand the financial impact of COVID-19 on consumers. Its results have shown that between April and May, 79 to 82% of households reported that their income had been negatively impacted.
Almost one in six (14%) reportedly said they had lost their jobs since the start of the lockdown – up from one in ten (10%) reported in early April. In addition, nearly 4 out of 10 (37%) said they have seen their work hours reduced because of the pandemic – up from 32% reported in the first week of April.
“The pandemic is creating major economic and financial distress for consumers, with many jobs in the South African economy already being impacted or at risk due to drastic demand shifts,” said Lee Naik, CEO of TransUnion Africa.
Mpumalanga still remains the most impacted province when it comes to unemployment due to COVID-19. Job loss in the province has increased to 26% (up from 12% since early April). This could potentially be driven by the effects of the lockdown on the agricultural and mining industry, which are known as the largest industries in the province.
Nearly two-thirds (64%) of consumers reported that their household budget changes during the pandemic involved cutting back on luxury spending. Forty percent have cancelled subscriptions or memberships, and just under one third (32%) have cancelled or reduced digital services which include wireless, satellite services and internet services, due to new household budget constraints.
There has also been a significant increase in consumers turning to payment holidays provided by loan providers as lender communication has intensified.
All in all, 44% of all consumers who are concerned about paying their bills reported that they are not able to make their rent payment. Further stats of concern include:
- 39% of consumers are not able to pay their personal loan
- 37% of consumers are not able to pay their cell phone bill
- 32% of consumers are not able to pay their credit card
“With the majority of households under considerable pressure, we can only reiterate the importance of lenders and consumers having constructive conversations around ways to deal with these extraordinary circumstances,” said Naik.