Millennials in debt distress, Gen X wary of help, Gen Z building smart habits

By: Afua Darko, Head of Business at Sanlam Credit Solutions

Sanlam Credit Solutions has unveiled its 2025 Credit Confidence Index, revealing a marked generational divide in South Africa’s credit behaviour, debt management, and financial confidence. Based on data from over 818 000 active users, the findings highlight critical insights into how different age groups engage with credit – and what this means for the future of financial resilience in the country.

“Understanding these generational patterns is key to empowering South Africans across all generations to achieve credit confidence,” says Afua Darko, Head of Business at Sanlam Credit Solutions.

Using its Credit Confidence Index, Sanlam Credit Solutions analyses behavioural trends across three key pillars:  

• Financial determination
• Financial resilience  
• Financial wellbeing

These pillars help to assess users’ ability to manage debt, withstand financial shocks, and maintain healthy credit behaviours over time. No matter the generation, the need for tailored, accessible credit support is evident.

Financial confidence starts with knowledge

The research reveals that revolving credit and personal loans are major contributors to financial strain across generations. However, many users are not leveraging this credit for long-term gains, such as asset acquisition. For example, only 17% of Millennials (those born between 1981 and 1996) currently have home loans – a sign of delayed or inaccessible wealth-building opportunities.

In April 2025, Statistics SA shared research that showed that 26 000 South Africans appeared in court due to bad debt. Drivers of this are likely to be high interest rates, a flat economy, rises in petrol prices and the cost of basic food baskets. But this debt is avoidable – and manageable – with the right financial education, planning and tools.

In response, Sanlam Credit Solutions is enhancing its free credit coaching services, which have already assisted over 24 000 users in the past four months alone. Coaches offer customised credit assessments, help correct inaccuracies in credit bureau records, and guide users towards sustainable debt management strategies.

“At Sanlam, our goal is to turn debt stress into credit confidence,” says Darko. “Financial confidence starts with knowledge and is built through consistent, informed action. We’re committed to supporting all South Africans on that journey.”

The Credit Confidence Index data shows that Millennials are under the most acute debt stress, with over half classified as high credit risks that lenders are wary of because there's a higher probability that they will not repay borrowed money on time or at all.

As many as 165 000 Millennials are dedicating more than 50% of their monthly income to servicing debt, according to records from VeriCred Credit Bureau, a registered South African credit bureau. Many have turned to debt counselling, with 56% of debt-stressed Millennials engaging Sanlam Credit coaches in recent months for support.

“Millennials are carrying the weight of unsecured credit, rising living costs, and delayed asset acquisition like home ownership,” says Darko. “The encouraging sign is that this group is actively seeking support – they’re not shying away from their financial reality.”

In contrast, Generation X users (those born between 1965 and 1980), while facing similar levels of credit risk, are far more skeptical about solutions like debt counselling. The report attributes this hesitance to lingering financial education gaps and generational attitudes towards formal financial assistance.

Gen Z showing high levels of digital financial literacy

Meanwhile, Generation Z (born between 1997 and 2012) is emerging as South Africa’s most financially optimistic demographic. Although relatively new to credit markets, this group is quickly gaining confidence. Only 4% of Gen Z users currently spend more than half their income on debt, and their low entry point into over-indebtedness positions them well for long-term success – provided they maintain healthy financial habits.

Importantly, Gen Z is showing high levels of digital financial literacy and openness to financial education. Credit guidance engagements are increasingly being adopted by this group, with early interventions focusing on how to build credit responsibly and avoid common pitfalls.

“Gen Z is demonstrating a remarkable willingness to learn. They’re leveraging digital tools, engaging in money conversations early, and showing real promise when it comes to building credit confidence,” says Darko. “We’re seeing the early signs of a generation that could change the trajectory of South Africa’s credit culture.”

Sanlam Credit Solutions remains committed to investing in financial literacy initiatives, digital coaching tools, and product solutions that will help consumers of all ages build sustainable credit profiles.