South African consumers are grappling with rising inflation and declining financial optimism, as highlighted in TransUnion's Q2 2026 Consumer Pulse Study. With 79% ranking inflation as a top concern, households are adjusting their spending and borrowing behaviours to navigate ongoing financial strain.
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South African households remain under significant financial pressure, with rising living costs continuing to outpace income growth and leaving many consumers struggling to keep up with their financial obligations.
According to TransUnion's Q2 2026 Consumer Pulse Study (CPS), nearly four in 10 South Africans (39%) expect to miss at least one bill or loan repayment in the coming months, highlighting the ongoing strain that persistent inflation places on household finances.
The findings suggest that while consumers adapt to a challenging economic environment, there is little evidence of a broad-based recovery. Instead, households make increasingly difficult trade-offs as affordability pressures reshape spending, borrowing and saving habits.
"Consumers are still managing, but the margin for error is shrinking. Even modest increases in essential costs force difficult trade-offs, which is reflected in lower confidence and more cautious credit behaviour," says Ayesha Hatea, director of research and consulting at TransUnion South Africa.
While household finances remain relatively stable compared with a year ago, confidence about the future continues to deteriorate.
The survey finds that 43% of respondents say their household finances are better than they expected, marginally down from 44% in the second quarter of 2025. However, four in 10 consumers (40%) say their financial position is worse than planned, underlining the continued pressure many families face.
Financial optimism also softens. Two-thirds (66%) of respondents say they are optimistic about their financial future, down from 71% a year earlier, while the proportion expressing pessimism rises from 15% to 19%.
Income expectations weaken in tandem. Seven in 10 South Africans expect their household income to increase over the next 12 months, compared with 75% who hold that view a year ago.
The gap between earnings and living costs remains a major concern. Only 37% of respondents believe their income keeps pace with inflation, while 41% disagree. Unsurprisingly, the rising cost of essentials such as groceries and fuel ranks among the top three concerns for 79% of those surveyed.
According to Hatea, inflation remains the single biggest challenge facing households.
"Even where incomes are rising, essential costs quickly absorb that relief. This makes budgeting discipline and financial awareness more important, because households need to know where they can adjust when pressure rises."
Faced with mounting financial pressure, South Africans tighten their household budgets and reduce non-essential expenditure.
More than half of respondents (53%) say they cut back on discretionary spending over the past three months, including dining out, entertainment and travel. A further 28% cancel subscriptions or memberships, while 24% reduce or cancel spending on digital services such as internet, streaming platforms and pay television.
The survey also reveals contrasting approaches to debt and savings.
Nearly one-third (32%) accelerate debt repayments, while 27% increase contributions to emergency savings or stokvels. One in five respondents reports saving more for retirement.
However, not all households are in a position to strengthen their finances. Fourteen percent say they reduce retirement savings, another 14% rely more heavily on available credit, and 13% draw on retirement savings to cover expenses.
Looking ahead, consumers expect essential costs to continue climbing. Around 37% anticipate spending more on bills and loan repayments over the next three months, while one-third expect higher medical expenses. Although 36% intend increasing contributions to retirement savings or investments, 16% expect to reduce them.
"These findings show how carefully households are trying to manage trade-offs. Some consumers are still building buffers and paying down debt, while others are drawing on savings or credit to get through the month. That is why the broader picture is one of sustained financial adjustment rather than simple improvement," says Hatea.
Despite ongoing financial pressure, access to credit remains an important part of household financial planning.
An overwhelming 92% of respondents say access to credit products is important to achieving their financial goals, unchanged from a year ago.
Consumers' perceptions of credit access improve, with 45% believing they have sufficient access to credit, compared with 38% a year earlier. Half of respondents also believe they would be approved if they submitted a credit application.
However, improved confidence does not translate into stronger demand.
Only 36% of consumers intend applying for new credit or refinancing existing debt over the next year, a figure that remains broadly unchanged from 2025.
Among those who consider applying for credit but decide against it, 30% cite the cost of borrowing as the primary reason. Credit history is identified as a barrier by 23%, while 22% point to concerns about income or employment.
"Credit demand has not disappeared, but consumers are becoming more selective about the obligations they take on. For many households, access is not only about whether credit is available. It is also about whether the cost, repayment terms and approval process feel manageable," Hatea says.
Where consumers do intend borrowing, demand shifts towards shorter-term, more flexible credit products. Among prospective applicants, 34% plan to apply for a personal loan, 29% for a new credit card, and 27% intend using buy now, pay later services.
The study also points to growing adoption of digital financial services.
Among respondents using digital banking services, 46% say they bank with a digital-only institution, while 56% have used buy now, pay later services. Nearly a quarter (23%) also report using digital or fintech providers.
However, increased digital participation is accompanied by growing concerns about fraud and cybercrime.
More than half of respondents (56%) say they have been targeted by online, email, phone or SMS fraud attempts during the past three months.
Voice phishing (vishing) is the most common scam reported, affecting 34% of those targeted, followed by SMS phishing (smishing) at 33% and email phishing at 31%.
In addition, 26% of respondents say they have been notified that their personal information or online account details have been exposed in a data breach during the previous three months.
Consumers take steps to improve their online security. More than half (53%) change passwords in response to cybersecurity concerns, while 37% check their credit reports and 12% purchase anti-virus or internet security software.
Nevertheless, many remain uncertain about how to respond to cyber threats. Among those who take no action despite security concerns, 56% say they simply do not know what steps to take.
"As digital financial participation increases, security becomes a core part of financial confidence. Consumers need clear, practical guidance on how to protect their information and respond effectively when risks arise," Hatea says.
Despite the difficult economic climate, the survey suggests South Africans remain actively engaged with their financial wellbeing.
More than one-third (34%) monitor their credit reports every month, while 13% do so weekly and 6% check them daily.
More than half of respondents (52%) also believe their credit scores would improve if lenders considered additional financial information beyond traditional credit reports, including rental payment histories, buy now, pay later transactions and short-term loan repayments.
The findings reflect growing demand for greater financial visibility and more inclusive credit assessment as consumers navigate an increasingly uncertain economic environment.
Overall, TransUnion's latest Consumer Pulse Study paints a picture of resilience tempered by mounting financial constraints. South African households continue to adapt by reducing discretionary spending, managing debt more carefully and seeking greater control over their finances, but persistent inflation and rising living costs continue to test their ability to withstand further economic shocks.
"Consumers are doing their best to stay in control in a difficult environment. For lenders and financial service providers, the opportunity lies in supporting that effort through transparent pricing, responsible access to credit, and tools that help consumers anticipate and manage financial stress before it escalates," Hatea says.
PERSONAL FINANCE