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Nature and determinants of household retirement savings behaviour in South Africa

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  • Ling Ting
  • Umakrishnan Kollamparambil

Abstract

This study investigates the savings behaviour among South African households using the General Household Survey data for the periods 2002-04 and 2008-10. The age-cohort analysis shows that households achieve their income peaks when the household heads are in their early forties, earlier than in most other countries. Although initial support for the life-cycle hypothesis framework in the form of smoothed consumption was found from multivariate analysis, a closer examination reveals that the consumption-income ratio is also smooth over the age and cohort variables. This indicates that savings rates do not follow a hump-shape pattern as required in the life-cycle hypothesis framework. While households are seen to be able to maintain their consumption in retirement years through government grants, a large portion of the grants seem to be utilised for savings. This shows that the government grants have the dual effect of sustaining consumption levels while disincentivising savings during working years.

Suggested Citation

  • Ling Ting & Umakrishnan Kollamparambil, 2015. "Nature and determinants of household retirement savings behaviour in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 32(6), pages 675-696, November.
    • Handle: RePEc:taf:deveza:v:32:y:2015:i:6:p:675-696
    DOI: 10.1080/0376835X.2015.1063987
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    Cited by:

    1. Helena Ting & Martina Bozzola & Timothy Swanson, 2020. "Evaluating the propensity to save in South Africa using weather-income relationship," CIES Research Paper series 49-2017, Centre for International Environmental Studies, The Graduate Institute.
    2. Dorrit Posel & Adeola Oyenubi & Umakrishnan Kollamparambil, 2021. "Job loss and mental health during the COVID-19 lockdown: Evidence from South Africa," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-15, March.

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