1Life Insurance’s 2024 generational wealth youth survey confirms that youth in South Africa are far from achieving financial freedom and building wealth – placing them at a tremendous disadvantage.

Youth unemployment in South Africa currently sits at, 45,5% according to Stats SA, and the study by 1Life revealed that of those who do have a source of income, more than 50% do not know how to build a financially stable future.

In addition, the study revealed that fewer than 30% of South African youth have a solid monthly budget in place.

“Looking at our book, we identified a big gap in the youth market when it comes to financial education, despite being the future ones that have the potential to build wealth and break generational debt in their families,” says Siphelele Sokhela, brand manager at 1Life Insurance.

“If we consider that the current cost of living has already made it hard for households to get by, this gap is an indication that this reality may not change anytime soon, and in some families, it may never change if the youth are not equipped to carefully and smartly manage their money.”

1Life stats show that fewer than 20% of youth have any form of insurance – which means that of the 54% who are employed, only a small portion of them have the necessary financial protection in place should the worst happen. Furthermore, only this small portion has a real shot at breaking the debt chain and building generational wealth in their families.

“The good news is that 80% of the respondents know that they can start building wealth as soon as they land their first job,” says Sokhela. “However, the lack of financial education, and misconception when it comes to wealth building tools available to them, are major contributing factors to them starting their financial life on the back foot – leading to lack of financial security.

“For example, only 40% of the respondents see having insurance policies such as life cover, or retirement annuity as a means to build wealth – both of which are essential.”

A closer look at the stats indicated that only 35% of South African youth have life insurance, while only 13% have dread disease cover, and 18% have disability cover. This may be due to many factors, of which affordability may be one, especially in our current economy.

However, considering that fewer than 30% of South African youth have a solid monthly budget in place, this is a clear indication of the lack of financial management skills among the youth – largely due to insufficient education in this space.

“Having money is one thing, and knowing how to use it is another. It is true that the current economy has made it tough for South Africans to get by, and without a budget in place, it is impossible to manage money wisely,” says Sokhela.

“While one could get away with not having financial literacy in the past, that is no longer the case,” says financial influencer Yolenda Jawe. “Financial literacy has become a necessity for all South Africans, not only when it comes to meeting the day-to-day financial demands, but also in making sure that one builds a financially stable future for themselves and their loved ones.”