MIDDLE-to upper-income earners in SA are living longer and saving less and only 53% of retirees say they are satisfied with the provisions they have made for retirement, according to the Financial Security Barometer released yesterday by independent financial services group acsis.

The report comes soon after national savings month in July, when Finance Minister Pravin Gordhan warned that the South African economy was missing out on the savings dividend that should result from having a large workforce relative to the retired population.

The World Economic Forum’s 2010-11 Global Competitiveness Report noted that SA’s gross saving rate equated to 16% of gross domestic product (GDP) in 2009, compared to China’s 52%, India’s 37% and Russia’s 22% in the same year.

The Organisation for Economic Co-operation and Development estimates that a structural savings rate of about 25% is required to sustain the 5%-6% economic growth rate the government is aiming for.

But from 2001 to last year the household savings rate declined by an average of 0,1% of GDP every year. Before 1994 South Africans saved about 30% of their income. The barometer, released by acsis, was based on interviews with 400 households with earnings of at least R30000 a month. It sought to establish how South Africans over 35 were planning for their retirement.

The survey found that 52% of all respondents said a financial planner was their main source of financial advice, while 26% of respondents said they took financial planning advice from friends or family, and 30% cited the internet. Acsis CEO Andrew Bradley said the statistics were particularly worrying considering that even though an investment might promise good returns, it would not necessarily be the best option for post-retirement income as the needs and circumstances of individuals varied widely.

The survey found that those who used financial planners had more diversified provisions, saved earlier and were more financially secure.

Mr Bradley said the results indicated that even those who used a financial planner were at risk when investing in underperforming provisions, as 43% of respondents said they were unaware of their financial planner’s qualifications and only 2% were aware they were consulting with a certified financial planner.

The responses given on how respondents chose to pay their financial planners — whether through a fee or commission — showed that investors were at risk of choosing inappropriate provisions.

South African Savings Institute CEO Elizabeth Lwanga-Nanziri said the issue of retirement savings was broad and not limited to the middle- and upper-middle classes.

She said the report was not surprising as “only about 10% (of people) seem to be saving to retirement and those who have been saving tend to cash in their funds”. The government needed to fast-track programmes that gave people an incentive to save more.

gernetzkyk@bdfm.co.za