SAVINGS & INVESTMENT MONITOR

Transcription

1 OLD MUTUAL SAVINGS & INVESTMENT EDITION

2 2 Objectives To determine the kind of savings and investment vehicles being used by metro working Namibians; To understand their levels of property ownership and repayment patterns; To understand the satisfaction levels of their overall household financial situation; To understand their confidence levels in making financial (savings and investment) decisions; To determine their savings objectives and financial goals for the next 5 years; To build an understanding of their attitudes towards work, life and financial affairs; To understand their levels of debt and what kind of debt they have as well as repayment periods and patterns; To test their financial readiness and awareness of the value for retirement provision and the age they would like to retire; To determine their primary source of obtaining advice and knowledge regarding savings and investments; and To test their appetite for Internet usage (provided they have access) and behaviour towards online purchasing. Further to the above Old Mutual Namibia would like to expand their understanding of the household debt, but delving deeper into: the seasonal trend (time of the year) for acquiring of debt and to enter into saving; and the types of debt per household and the repayment periods for the debt. Lastly, Old Mutual Namibia would like to understand the attitude of the metro working Namibian s toward financial institutions such as banks, insurers, microlenders, etc.

3 3 Methodology 449 face-to-face interviews were conducted with the following people: People who are very involved in the investment and financial decisions of their households People responsible for their own savings and investment decisions Working part-time or full-time Between 18 and 64 years of age Face-to-face interviews are typically conducted with respondents in their homes The average duration of an interview was 30 minutes

4 4 Sampling & regions Oshakati / Ondangwa Walvis Bay / Swakopmund Windhoek Grand Total PERSONAL INCOME TARGET PER REGION N$1 N$ % 30% 30% 30% N$2 000 N$ % 28% 27% 27% N$5 000 N$ % 23% 23% 23% Oshakati / Ondangwa 115 N$ % 20% 20% 20% Grand Total 100% 100% 100% 100% AGE TARGET PER REGION years 20% 20% 20% 20% Walvis Bay / Swakopmund years 25% 25% 25% 25% years 30% 30% 30% 30% years 25% 25% 25% 25% Grand Total 100% 100% 100% 100% Windhoek 219 GENDER TARGET PER REGION Female 50% 50% 50% 50% Male 50% 50% 50% 50% Grand Total 100% 100% 100% 100%

5 5 Contents 1. DEMOGRAPHICS 2. USAGE OF PRODUCTS & INVESTMENTS 7. ATTITUDES TOWARDS WORK, LIFE & FINANCIAL AFFAIRS 8. RETIREMENT: READINESS, PROVISION, AGE CLICK TO RETURN TO THIS MENU 3. PROPERTY OWNERSHIP & REPAYMENT PATTERNS 9. SOURCE OF ADVICE & KNOWLEDGE 4. DEBT: TYPES & TRENDS 10. INTERNET: USAGE, BEHAVIOUR TOWARDS ONLINE PURCHASING 5. FINANCIAL SITUATION & SAVINGS BEHAVIOUR 11. CONCLUSION 6. SATISFACTION WITH OVERALL HOUSEHOLD FINANCIAL SITUATION

6 DEMOGRAPHICS OLD MUTUAL

7 7 Demographics (Respondent) GENDER ETHNIC GROUP 50% 50% 92, 20% 22, 5% 1, 0% years years years years years years years years years 1% 5% 4% 2% AGE 335, 75% 17% 13% 14% 19% 25% Black Coloured White Other

8 8 Demographics (Respondent) MARITAL STATUS LEVEL OF EDUCATION 70% University completed Some university 12.7% 18.0% Any other post-matric qualification Some college or technikon education 0.4% 6.5% 25% Matriculated Some high school 22.3% 29.6% 2% Divorced or separated Married or living with a partner Single, never married 2% Widowed Primary school completed Some primary school No formal education 3.3% 0.9% 6.2%

9 9 Demographics (Respondent) WORKING STATUS SECTOR WORKED IN Work part-time or less than 30 hours a week for yourself or Work part-time or less than 30 hours a week for a company or 6% 6% 186, 41% 88, 20% 263, 59% Work full-time or 30 hours a week or more for yourself or in 35% Private sector Work full-time or 30 hours a week or more for a company or i 52% Parastatal which is a company partly or wholly owned by government Public sector e.g. in a government department

10 10 Demographics (Respondent) SELF-EMPLOYED? PERSONAL INCOME N$ or more per month 1% N$ N$ per month 2% 186, 41% 263, 59% N$ N$ per month N$ N$ per month 3% 17% N$5 000 N$9 999 per month 27% N$2 000 N$4 999 per month 20% No employed by somebody else Yes own business N$1 000 N$1 999 per month N$500 N$999 per month N$1 N$499 per month 5% 4% 20%

11 11 Demographics (Household) MONTHLY HOUSEHOLD INCOME NUMBER OF PEOPLE CONTRIBUTING TO HOUSEHOLD INCOME Refused 1% N$ or more per month N$ N$ per month 2% 3% 36% 40% N$ N$ per month 9% N$ N$ per month 19% N$5 000 N$9 999 per month N$2 000 N$4 999 per month 20% 27% 12% 13% N$1 000 N$1 999 per month 13% N$500 N$999 per month N$1 N$499 per month 2% 4% One Two Three Four or more

12 12 Demographics (Household) CHILDREN / DEPENDANTS DEPENDANTS OTHER THAN CHILDREN OR A SPOUSE / PARTNER S 96, 21% 102, 23% 353, 79% 347, 77% No Children Children No other dependants Other dependants

13 13 Demographics (Household) SINGLE MOTHER? LIVE AT HOME WITH PARENTS? 105, 54% 88, 46% 92, 20% 22, 5% 335, 75% NOT a single mother Single mother No Yes I live with them in their home Yes they live with me in my home

14 14 Summary 449 interviews were conducted in 3 areas around Namibia: Oshakati / Ondangwa Walvis Bay / Swakopmund Windhoek The majority of the respondents were between the ages of 25 & 30, working full time and mostly earning an income between N$5,000 and N$10,000 per month Most of the respondents were single and had completed some high school education The respondents were mostly black and worked in the private sector There are mostly 2 people contributing to the monthly income of a household with most respondents having children and other dependants being provided for 75% of the respondents indicated that they do not live with their parents

15 USAGE OF PRODUCTS & INVESTMENTS OLD MUTUAL

16 16 Usage of products & investments Savings Savings account Medical aid or medical cover Funeral policy/plan (at a specific company or funeral parlou Life insurance Current / cheque account Pension or provident fund Home loan, bond or mortgage Education policy or plan Credit card Accident cover Medical insurance Retirement annuity Insurance that covers your home or belongings (e.g. car, hou Car or vehicle loan Property Store cards/shop accounts Personal loan from a financial institution Disability or dreaded disease insurance Unit trusts investment Cash savings (not banked) 9.11% 8.06% 7.78% 7.45% 5.79% 4.75% 4.53% 4.14% 2.92% 2.70% 2.48% 2.26% 2.10% 1.99% 1.99% 1.93% 1.60% 1.38% 1.10% 19.37%

17 PROPERTY OWNERSHIP & REPAYMENT PATTERNS OLD MUTUAL

18 18 Property ownership 0% 100% 15% paying off home loan / bond Don t own property 55% (247) 45% (202) Own property

19 19 Bond contributions Advanced funds from the home loan during past year 1.4% Struggle to meet monthly bond repayments 14.5% Only pay the monthly minimum required 44.9% Used to pay extra into the home loan, but can no longer do this Make regular lump sum payments into the bond(s) over and above the required payments fairly regularly 8.7% 7.2% Pay extra into bond(s) every month 23.2%

20 20 Summary The majority of the respondents had a savings account followed by medical aid and a funeral policy as well as life cover and/or a current/cheque account 55% of the respondents don t own fixed property, while of those that have property 15% were paying a home loan / bond on the property Of those that pay a bond or home loan the majority (45%) pay the monthly required amount while 23% indicated that they are able to pay more than the monthly amount

21 DEBT: TYPES & TRENDS OLD MUTUAL

22 22 Is there a specific time of year you acquire a loan to cover expenses? 66% 23% 5% 7% No Month of the year Quarter of the year Half of the year

23 23 Is there a specific time of year you acquire a loan to cover expenses? January 40% 66% WHICH MONTH? February March 3% 19% April May 1% 6% WHICH PART OF THE MONTH? June July August September 4% 0% 0% 11% 64% 21% 15% 23% October November December 3% 3% 10% Beginning of the month End of the month Middle of the month 5% 7% No Month of the year Quarter of the year Half of the year

24 24 Is there a specific time of year you acquire a loan to cover expenses? 66% 56% WHICH QUARTER? 25% 6% 13% 23% 1st 2nd 3rd 4th 5% 7% No Month of the year Quarter of the year Half of the year

25 25 Is there a specific time of year you acquire a loan to cover expenses? 66% 67% WHICH HALF? 33% 23% 5% 7% 1st 2nd No Month of the year Quarter of the year Half of the year

26 26 Debt types Home loan, bond or mortgage 19% Car or vehicle loan Store cards/shop accounts Personal loan from a financial institution 8% 8% 8% Overdraft facility Personal loan from a microlender Revolving credit Instalment sale (e.g. large household appliances) Informal loan (e.g. from a loan shark, community group ) 2% 2% 1% 1% 0%

27 27 Repayment periods DEBT TYPE DEBT IN MONTHS DEBT IN YEARS Home loan, bond or mortgage Car or vehicle loan 55 5 Personal loan from a financial institution 33 3 Personal loan from a microlender 25 2 Instalment sale (e.g. large household appliances) 20 2 Revolving credit 42 4 Store cards/shop accounts 24 2 Informal loan Don t know

28 28 Summary 35% of the respondents indicated that there is a specific time during the year that they acquire loans to cover expenses Those who need money during a specific month, acquire a loan in January Respondents who need money during any month usually acquire a loan at the beginning of the month Those who need money during a specific half of the year usually acquire a loan during the second half and those who need money in a specific quarter indicated the second quarter of the year (April to June) The biggest debt held is for home loans followed by vehicle loans, store accounts and personal loans with financial institutions

29 FINANCIAL SITUATION & SAVINGS BEHAVIOUR OLD MUTUAL

30 30 Saving more or less these days? Saving more than I was a year ago 36% About the same 26% Saving less than I was a year ago 38%

31 31 Saving more or less these days? About the same 26% No salary / income increase Disposable income did not change 3% 13% Inflation / expenses increasing 2% Unforeseen expenses 2% Dependants limit amount that can be saved 2% Recently started working / business 1% Education 1%

32 32 Saving more or less these days? Inflation / expenses increasing 19% Saving less than I was a year ago 38% Dependants limit amount that can be saved Business is struggling Cannot keep up with expenses Insufficient salary / income Income not increasing at same rate as expenses Paying off debt Decrease in income Rent increased Private school 6% 4% 3% 3% 2% 2% 2% 1% 1%

33 33 Saving more or less these days? Saving more than I was a year ago 36% Salary / income increased Prospering business New job / promoted and salary / income therefore increased Expenses less this year Spend money wisely Specific saving goal Debt paid off / at least relieved somewhat Unforeseen expenses Expenses not too high Investing in property / shares / savings products Recently started working / business Staying alone 6% 4% 2% 2% 2% 2% 1% 1% 1% 1% 1% 10%

34 34 Summary 38% of the respondents felt they were saving less than a year ago due to inflation and expenses increasing 36% of the respondents said they were saving more as their income had increased 26% indicated they were saving the same, because of no salary or income increases

35 SATISFACTION WITH OVERALL HOUSEHOLD FINANCIAL SITUATION OLD MUTUAL

36 36 Satisfaction with overall household financial situation 29% 12% 10% 16% 13% 4% 5% 4% 2% 5% Not satisfied at all Extremely satisfied AVERAGE RATING OF 4.72 OUT OF 10

37 37 Financial situation CURRENTLY IN THE NEXT 6 MONTHS 20% 29% 51% 7% 21% 72% Better than it was a year ago About the same Worse than it was a year ago Get better Get worse Stay the same

38 38 What are you saving for? Children s Children s education To buy food To buy a specific item Christmas / end of year expenses Funeral expenses To provide for my family if I die Medical expenses Holiday Home improvements Money to start my own business My own education Retirement / old age To pay off debt Car / vehicle Emergency expenses / rainy day fund Deposit on a home / immovable property Other special celebrations (e Lobola / to get married Large household appliances No specific reason - just because it s a wise thing to 10% 10% 8% 5% 4% 35% 30% 30% 28% 27% 26% 23% 23% 21% 20% 19% 17% 17% 56% 54%

39 39 Is there a specific time of the year that you find yourself saving more money than normally? Annual bonus month 47.6% When? More customers / income / profit When their expenses for that specific month are low 6.2% 18.7% No 26% Yes 74% Overtime Holidays Birthday When they're awarded a tender When no school fees or taxi to school need to be paid Not traveling When they do additional work S&T 2.6% 3.7% 1.8% 1.5% 1.1% 1.1% 0.7% 0.7% Other mentions: Quarterly bonus month When saving to buy livestock Beginning of year when medical aid still covers everything Save for Christmas and New Year Every 4th month When I go on leave Before end of year When livestock is sold Mid-year Birthday bonus month

40 40 Financial goals for next 5 years Own / buy / build a house Own / buy / build a house or other property Start own business Purchase / own their own vehicle Expand business Get married / Start a family Repay debt Save money Renovate / improve property Buy a better / expensive car / own many cars Provide children with good / better education Travel Save for education Take care of family Graduate Be a livestock owner Higher salary / Promotion Have a well-paying job Farm Have lots of money Further their studies Save enough for retirement Financial independence 11.4% 6.7% 6.2% 5.1% 4.5% 3.8% 3.3% 3.1% 3.1% 2.9% 2.4% 1.8% 1.8% 1.8% 1.8% 1.6% 1.6% 1.3% 1.1% 25.2% 21.6% 41.0%

41 41 What amount of the money that you get each month would you say you save? 21.1% 19.6% 21.8% 19.8% 9.9% 4.7% 1.3% 0.4% 0.4% 0.7% N$1 N$499 N$500 N$999 N$1 000 N$1 999 N$2 000 N$4 999 N$5 000 N$9 999 N$ N$ N$ N$ N$ N$ N$ or more Don't know

42 42 Would you rather save and invest money where... There is potential (no guarantee) for very high growth and interest, but the risk of losing money is higher There is the potential (no guarantee) for moderate (inflation beating) growth and interest, with some risk of losing money 21% 19% The returns are guaranteed, but are very low and may not beat inflation 33% None of these options. I prefer not to invest my money at all 27%

43 43 Confidence in ability to make good savings & investment decisions 23% 7% 5% 9% 11% 15% 10% 5% 13% 2% Not at all confident Extremely confident AVERAGE RATING OF 5.47 OUT OF 10

44 44 Do you plan to support your parents and/or other family members? Yes, I am planning to support them No, none around to support No, I am not planning to, I think they will/ should be able to support themselves No, I am not planning to, but I think that I will probably end up having to support them 94% 2% 2% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

45 45 Summary A greater portion of the respondents (42%; rating of 1 to 4) were less satisfied with their household s financial position 72% of the respondents did however feel that their financial position will improve in the next 6 months and just over half felt their position was better than what it was a year ago When saving most people were saving for a child s education or to buy food, followed by saving to buy a specific item Respondents were mostly saving more after receiving their annual bonus The biggest goal for 41% of the respondents was to own their own property, then start a business and then to own a vehicle The majority of the respondents are saving up to N$5,000 per month When it comes to investing their money respondents are risk averse and rather invest where more returns are guaranteed About 54% of the respondents are confident they can manage their own savings and investments 94% of the respondents plan to support family members in the future

46 ATTITUDES TOWARDS WORK, LIFE & FINANCIAL AFFAIRS OLD MUTUAL

47 47 Agreement with statements Community support is very important to you Your children should look after you when you are old The government will look after you if you are not able to look after yourself 62% 65% 35% 22% 8% 7% 7% 11% 17% 23% 17% 26% Strongly disagree Disagree slightly Agree slightly Strongly agree

48 48 Agreement with statements You like to take risks in life You like to own products that are the most technologically advanced You feel confident about the Namibian economy 26% 18% 14% 15% 14% 17% 21% 31% 37% 35% 41% 31% Strongly disagree Disagree slightly Agree slightly Strongly agree

49 49 Agreement with statements You really struggle to find a good balance between your work and your life Your finances never seem to be properly organised You actively plan your finances five to ten years ahead 37% 39% 38% 33% 35% 14% 18% 24% 16% 13% 13% 19% Strongly disagree Disagree slightly Agree slightly Strongly agree

50 50 Agreement with statements In today's society there is no alternative but to get into debt You consider yourself a spender, not a saver You are constantly trying to become more knowledgeable about financial matters 37% 39% 41% 31% 26% 25% 22% 22% 18% 20% 8% 12% Strongly disagree Disagree slightly Agree slightly Strongly agree

51 51 Agreement with statements Buying on credit is part of your life and you couldn't make ends meet without The world of financial services leaves you confused You want to learn more about how to save 59% 39% 38% 19% 23% 21% 22% 25% 16% 22% 8% 7% Strongly disagree Disagree slightly Agree slightly Strongly agree

52 52 Agreement with statements You try and avoid debt wherever you can Saving for the future is not a priority in your life right now Money is something you just don't talk about in your family 58% 31% 27% 21% 21% 23% 22% 27% 25% 25% 9% 10% Strongly disagree Disagree slightly Agree slightly Strongly agree

53 53 Agreement with statements The only way to improve your financial position is to take a few risks You feel that death, funeral and disability cover are more important to you and your family than retirement savings Saving for education is more important to you than saving for retirement 44% 18% 19% 16% 24% 15% 35% 35% 32% 27% 26% 9% Strongly disagree Disagree slightly Agree slightly Strongly agree

54 54 Agreement with statements You are not always sure who to turn to when it comes to your finances You would like financial advice, but it is hard to find somebody you trust to give it to you You seek advice from family and friends when making financial decisions 36% 34% 39% 27% 39% 31% 17% 12% 14% 20% 15% 16% Strongly disagree Disagree slightly Agree slightly Strongly agree

55 55 Agreement with statements You have enough money left for savings after covering all your expenses You are worried that you will not have enough money for retirement 35% 33% 32% 23% 22% 22% 13% 21% Strongly disagree Disagree slightly Agree slightly Strongly agree

56 56 Agreement with statements Dealing with personal finances is stressful You find the language used in financial paperwork confusing 29% 31% 34% 40% 14% 20% 16% 17% Strongly disagree Disagree slightly Agree slightly Strongly agree

57 57 Summary /1 The respondents believe strongly in community support and that their children should take care of them. A large portion believes the government will take care of them if they cannot do so themselves Despite being risk averse when investing, 56% are willing to take risks in life They enjoy modern technology The respondents are less optimistic about the local economy Most are battling to find a good balance between work and life, yet feel their finances are properly organised and plan up to ten years in advance The respondents were not convinced getting into debt is the only alternative in today s society and consider themselves to be savers

58 58 Summary /2 They have an eagerness to learn about financial matters and find financial services confusing. They want to learn more about saving They don t rely on credit to survive and avoid debt where possible Only 52% indicated saving was a priority right now in their lives Although money matters seems to be a taboo topic among the family 63% believe you need to take risks to improve your financial position Providing for the passing of a loved one was more important than providing for retirement Saving for education was even more important than retirement planning When seeking advice respondents were not sure who to turn to, because of trust issues and so most seek advice from family or friends 56% indicated they have enough left to save after covering monthly expenses Most are concerned about retirement and felt that dealing with finances was very stressful

59 RETIREMENT: READINESS, PROVISION, AGE OLD MUTUAL

60 60 Satisfaction with overall financial readiness or provision for retirement at this point in time? 30% 14% 15% 8% 6% 8% 8% 3% 2% 6% Not satisfied at all Extremely satisfied AVERAGE RATING OF 4.95 OUT OF 10

61 61 Plan to retire at what age? 60% 26% 1% 2% 5% 4% 0% 2% At 20 to 29 years old At 30 to 39 years old At 40 to 49 years old At 50 to 59 years old At 60 to 69 years old At 70 yo 79 years old At 80 to 89 years old At 90 to 99 years old

62 62 Do you think you would work for pay after you retire? If yes, why? 39% 61% 26% 35% No, won't work after retirement You enjoy working or want to remain engaged and stimulated You will need the money

63 63 Approximate value of savings in retirement fund at the moment 26% 19% 55% Do not have a retirement fund No, don't have an idea of approximate amount Yes, know approximate amount

64 64 Summary The respondents were not satisfied with their financial readiness for retirement Most planned to retire between the age of 60 and 70 and intend to continue working as they believe they will need the money 55% do not know how much funds lie in their retirement fund

65 SOURCE OF ADVICE & KNOWLEDGE OLD MUTUAL

66 66 Primary source of information for personal finance, or savings and investment Bank Consultant Internet Newspapers Radio TV Financial Advisor / broker at a financial institution Magazines - business Word of mouth / friends and colleagues Independent financial advisor Magazines - general Brochures from banks / financial institutions Cell phone banking Call centre at a financial institution 17.4% 13.6% 11.4% 9.4% 6.5% 4.7% 4.2% 2.4% 1.3% 1.3% 0.2% 0.2% 27.4%

67 67 When did you last consult a financial advisor for advice? 47% 21% 10% 10% 3% 4% 4% Never Never More than 5 years ago 3 to 5 years ago 2 to 3 years ago 1 to 2 years ago 6 months to a year ago In the last 6 months

68 68 Summary The respondents primary source for financial information was a bank consultant, followed by the internet, newspapers, the radio and TV 47% have never consulted a financial advisor, while 21% having done so in the last 6 months

69 INTERNET: USAGE, BEHAVIOUR TOWARDS ONLINE PURCHASING OLD MUTUAL

70 70 Typically, how do you access the internet? Cellphone / mobile phone 76% Laptop 29% Desktop computer 19% I do not access the internet 14% Tablet / ipad 8%

71 71 Which of these have you ever bought online? Music / DVD s / music and movie downloads 21% Books Flights, travel and accommodation Clothes, shoes Technology applications and tech appliances Concert, sports or movie tickets Groceries Financial products (policies, investments) 9% 7% 6% 5% 3% 1% 1%

72 72 Would you consider buying a financial product, such as policy or investment, online? Yes, definitely 9% 8% 4% Yes, probably Neither / nor No, definitely not 62% 17% No, probably not

73 73 Summary Most respondents access the internet via a mobile phone and mostly buy music and DVDs online They will not consider buying a financial product online

74 CONCLUSION OLD MUTUAL

75 75 Conclusion Many of the respondents seemed to indicate that they do have funds available to invest They were more likely to invest in an educational policy and funeral cover than retirement, despite being concerned about retirement and it would seem have settled for the fact that they would have to work after retirement They save mostly after receiving their annual bonus and mostly lend money in the beginning of a year Many respondents indicated that they do not discuss finances with family, yet they seek advice from family and friends as they trust them Respondents are eager to learn about financial services, but they do not know whom to approach and are seeking financial advice mostly from a bank consultant Most respondents access the internet via their mobile phone, and while some have made online purchases were not willing to purchase financial products online

76 THANK YOU OLD MUTUAL