South Africans' pension funds and other investments like unit trusts have been hit hard by sharp declines in the value of shares and bonds
This is as a result of the worldwide Covid-19 pandemic; the subsequent lockdown, which incapacitated the global and South African economies; and SA losing its investment grade credit rating, Momentum/Unisa research reveals.
“The recent plummet in household real net wealth can be largely attributed to a sharp decline in the real value of households’ pension funds and other investments such as unit trusts,” said Van Tonder. However, by the end of Q1 2020 , the value of households’ real net wealth had recovered R426.7bn of its decrease – from its lowest point on March 22 2020.
“Apart from the immediate negative effect on the prices of shares and bonds, the future impact of these decisions will be devastating for economies and households – as company profits will decline, while millions of households are expected to lose their income due to extensive employment losses across the economy, negatively affecting their ability to live properly and save for retirement and other goals.
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