South African financial confidence hits 3-year high despite ongoing challenges

South Africans’ financial confidence has reached its highest level in three years, rising from 47 in 2024 to 53 out of 100 in 2025, according to the latest Sanlam Financial Confidence Index.

The study shows a nation that feels more in control of its finances, yet still struggles to turn confidence into consistent, long-term action.

According to the index, after years of economic instability, many South Africans are recalibrating their relationship with money. Half of respondents now believe they could recover from a financial setback, an 11% increase from last year.

Kele Boakgomo, CEO of Yugrow and behavioural scientist, says this reflects a nation in recovery: “We’re seeing a collective shift from survival mode to control. Financial stress has forced new habits – people are protecting what they have, prioritising stability, and learning to manage uncertainty. The next step is helping them turn control into long-term capability.”

The survey included 1,512 participants aged between 20 and 70, all earning at least R1,000 per month.

Lee Hancox, head of channel and segment marketing at SanlamConnect, says the rise in confidence may be linked to broader economic shifts.

“The growth in confidence may reflect a broader economic shift as the prime lending rate has dropped from a peak of 11.75% in 2023 to 10.50% in 2025, easing debt pressure and unlocking more disposable income. Real salaries are rising for the first time in seven years, and inflation is stabilising, giving households a renewed sense of control. However, gaps remain, and we’re still seeing a worrying lag in financial wellness.”

According to the index, two in five people now have a high or very high confidence score, compared to just 27% in 2024. Encouragingly, 68% say they dare to live within their means, 63% feel on track to pay off debt, and 58% believe they have the freedom to make life choices they enjoy.

But optimism has not yet translated into behaviour. Less than half of South Africans have written down or tracked their long-term goals, and only 42% trust their own financial abilities. Financial Wellbeing scores remain low at 32, compared to 61 for Self-Determination and 58 for Resilience, it says.

Boakgomo warns that confidence alone is not enough: “Confidence is only the first mile of change. People increasingly believe in their financial potential but still struggle to build habits and systems that turn optimism into outcomes. The next evolution will come from tools that make progress visible and habits automatic. When saving, tracking, and paying down debt become part of daily life, confidence turns into capability.”

Despite progress, emotional scars from years of volatility persist. 74% of South Africans still feel stressed about their daily finances, 72% are unhappy with their current financial situation, and two-thirds feel uncomfortable talking about money.

Hancox says these feelings often stem from inherited money narratives: “Our family circumstances shape deep-seated beliefs about money – beliefs that linger long after our situations change. Many people still carry the fear or shame they grew up with. We must start having real, open conversations and normalise money talk as an act of empowerment. Awareness is the first step; advice is the next.”

Although interest rates are easing and real salaries are finally increasing, many households continue to feel the impact of high debt costs and income losses from Covid-19. Global uncertainty is also weighing heavily, with rising mental health concerns suggesting that financial stress remains a significant burden, it says.

Generational differences are striking. Gen Z leads across every measure, from Self-Determination to Resilience, driven by optimism, digital fluency, and openness to financial learning. Millennials follow closely, while Gen X and Baby Boomers, often stretched by multigenerational care or retirement pressures, trail behind, the index reveals.

Hancox sees this as a turning point: “Gen Z’s optimism is an incredible opportunity. They’re open to learning, curious, and digitally empowered. Our job is to meet them with the consideration and creativity they deserve – tools, content, and advice that fit their world.”

Hancox says that sustainable progress lies in closing the gap between what people know and how they live.

“Sustainable progress lies in closing the space between what people know and what they live. Financial literacy must deepen in classrooms and campaigns; it needs to show up in people’s daily choices, their family conversations, and the tools they use," says Hancox.

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