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'We're the wealthiest we've ever been' (those with financial assets, anyway)

8 April 2021 7:09 PM
Tags:
Recession
Inequality
Unemployment
The Money Show
Reserve bank
Bruce Whitfield
Savings
Kevin Lings
Property
wealth
financial assets
household wealth
COVID-19

Reserve Bank stats show SA household wealth rose in 2020 despite Covid. But this obviously applies to a minority says Kevin Lings.

Despite the Covid-19 lockdown and the resulting economic fallout of a recession and terrible job losses, South African household wealth _increased _in 2020.

RELATED: More than half of SA population (61%) reliant on social grants - study

According to the Reserve Bank's latest figures, the value of the country's household assets amounted to more than R14 trillion at the end of last year.

That's an increase of nearly 5% year on year.

Bruce Whitfield interviews Kevin Lings, chief economist at Stanlib Asset Management.

Yes, we're the wealthiest we've ever been and that's despite Covid-19.... On a net basis, that's after debt, South Africa's household wealth went up!

Kevin Lings, Chief economist - Stanlib Asset Management

If you look at the breakdown, it's pretty much across the board. Financial assets went up quite nicely - mostly pension funds, unit trusts, and a lot of that would obviously be invested directly in the stock market. The value of residential property went up.

Kevin Lings, Chief economist - Stanlib Asset Management

We didn't take on a huge amount of debt... the Reserve Bank cut interest rates, which helped us as the cost of servicing our debt is quite significantly better.

Kevin Lings, Chief economist - Stanlib Asset Management

Of course to have derived these benefits, you would have had to have financial assets in the first place.

You have to have been invested. You can't simply have taken your money out of your pension fund or out of your unit trust, and unfortunately a lot of individuals were forced to do that.

Kevin Lings, Chief economist - Stanlib Asset Management

You need to retain long-term savings and you need to be constantly adding to that and you end up doing quite well.

Kevin Lings, Chief economist - Stanlib Asset Management

Lings notes the data suggests that 10% of the population has over 70% of the wealth.

This highlights the problem of huge inequality that South Africa still has to deal with.

So when we say that households are the wealthiest they've ever been, we're not referring to the entire population by any means. We're actually referring to a very small percentage...

Kevin Lings, Chief economist - Stanlib Asset Management

Listen to the complete conversation below:




8 April 2021 7:09 PM
Tags:
Recession
Inequality
Unemployment
The Money Show
Reserve bank
Bruce Whitfield
Savings
Kevin Lings
Property
wealth
financial assets
household wealth
COVID-19

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