SA among top 10 financially stressed countries amid high unemployment

South Africa has been ranked among the 10 most financially stressed countries in the world as low incomes and high unemployment weigh on households.

The country ranked ninth out of 32 countries in the 2026 Financially Stressed Countries Index compiled by the Australian comparison website, Compare the Market, scoring 3.39 out of 10.

The index measures financial stress using five indicators, including average annual salary, household price-to-income ratio, rent, monthly cost of living and unemployment.

READ: Unemployment shoots up to 33.6% in second quarter of 2026

Low salaries, high unemployment drag down SA

South Africa’s position was highly driven by the 33.6% unemployment rate as recorded in the second quarter of 2026. According to the index, this is the highest among the countries included in the index.

The average annual salary was equivalent to A$31 694 (approximately R36 5062), while the monthly cost of living was estimated at A$3 482. South Africa’s house-price-to-income ratio was 89.3, while its rent index was 12.8.

The figures reflected the difficulty of South African households that are under pressure, while incomes remain comparatively low. This as 8.5 million people remain outside the formal labour market.

Benay Sager, DebtBusters executive head, said income comparison was done using dollar terms instead of purchasing power parity, which could have been a better indicator.

He said South African incomes were made to appear lower than they are when considering purchasing power, but insists that income levels should also go up.

The country ranked between Australia, which was eighth with a score of 4.04, and Denmark, which was 10th at 3.89. Luxembourg topped the index at 4.78, followed by Ireland at 4.75 and the Netherlands at 4.35.

READ: High-earners spend their entire paycheques on servicing debt

SA rent compares better to peer countries

However, the index does not suggest that South Africa has the highest costs across all measures.

Its rent index and monthly cost of living were considerably lower than those recorded in many of the higher-ranked developed economies. Unemployment and income levels are important factors behind South Africa’s position.

The study also found that consumers were becoming more cautious about borrowing and spending as persistent price pressures affected household finances.

“The other three matrix, which have to do with house-to-income ratio, rent-to-income ratio and actual cost of living, we did really well in terms of those matrix compared to other peer countries.

“This leads me to believe that the income and unemployment ratios were given heavier weightings in terms of how this was calculated. Nonetheless, if you take a step back and think about it, we do know that our debt levels push us to be financially stressed and we do know from daily interactions with consumers at DebtBusters that there are practical things they can do to alleviate the situation,” said Sager.

Sager said highly indebted consumers should consider restructuring debt repayments, particularly when spending more than 30% of their take-home pay on debt.

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