More are losing their jobs due to Covid-19, says TransUnion
The country’s largest credit bureau says one in six people lost their job in early May, with defaulting on their bills just seven weeks away
TransUnion, considered the country’s largest credit bureau, says many people are losing their jobs or experiencing a reduction in work hours as a result of the Covid-19 pandemic and the resulting lockdown.
The company’s latest research into the economic effects of the pandemic, released on Thursday, reveals that the number of people losing their jobs increased from one in 10 in April to one in six in early May.
In addition, nearly four out of 10 (37%) of those negatively affected said they have seen their work hours reduced because of the pandemic — up from the 32% reported in the first week of April.
“The pandemic is creating major economic and financial distress for consumers, with many jobs in the SA economy already being impacted or at risk due to drastic demand shifts,” said Lee Naik, CEO of TransUnion Africa.
TransUnion began conducting research into how the pandemic is affecting the income and financial position of consumers last month.
The research is conducted using an online, research-panel method across a combination of computer, mobile and tablet devices. The survey includes quotas to balance responses to the census statistics on age, gender, household income, race, and region.
The data suggests consumers are going to battle to meet their financial obligations, with the expected shortfall in the near future rising from R500 in April to R7,500 in May.
Nearly two thirds (64%) of consumers reported that household budget changes during the pandemic have involved cutting back on discretionary spending, which has extended to things such as subscriptions, memberships and digital services.
On average, consumers expect to begin defaulting on bills or loans in about seven weeks time.
According to TransUnion, 44% of all consumers concerned about paying their bills report that they will not be able to pay their rent; 39% will not be able to pay their personal loans; 37% will not be able to pay their cellphone bill; and 32% will not be able to pay their credit card.