Unlike many diseases, COVID-19 has had a major impact on even those people who have not contracted it. At 25 June 2020, there have been 118 376 confirmed cases of COVID-19 in SA out of a population estimated to be some 59 million. That’s much less than 1%.

Perhaps the most profound impact has been on the economy, and by extension, on the finances of individual South Africans. When companies have to halt or curtail their operations due to lockdown measures, their revenues dry up. Wage cuts or retrenchments are often necessary to protect cashflow and save the business.

Similarly, a reduced economy means less tax revenue for the government, while emergency tax breaks for business and individuals can help reduce the short-term pain, but lead to longer-term budgetary consequences.
Survey results are starting to reveal the extent to which South Africans have been affected, and have highlighted the importance of making provisions for the potential financial consequences of the coronavirus.

South Africans are understandably experiencing increased anxiety during 2020 – much of this focuses on their finances. When the economy shrinks, people of every income level are affected, although the consequences tend to be most severe for people with the least financial resilience.

Data has shown that many South Africans (60%, according to a News24/Ipsos survey 24 June 2020) have had to dip into their savings to make ends meet – largely as a result of reduced incomes (according to the same survey, some 57% of people have either lost their jobs, had to take unpaid leave, or have had a pay cut).”

A similar percentage expressed real concerns that they would be unable to meet existing debt repayment obligations such as bond or credit card payments. These findings suggest that the economic pain could be sustained for many South Africans, as it is affecting their livelihoods now and potentially into the future, too, including eating into retirement plans. Whilst it may be challenging for individuals and employees to mitigate the effects of a recession, there are steps that can be taken to manage the risk to personal finances. These risks are likely to be most pronounced for people who are hospitalised due to contracting COVID-19.

Not only will they be unable to work and earn – potentially for several weeks, depending on the severity of their illness and the speed of their recovery –but they may also face increased costs during andafter their hospital stay.

Taking out focused pandemic insurance can make a real difference – having a guaranteed lump sum payout in the event of being hospitalised due to COVID-19, and potentially also a daily cash sum, offers immense peace of mind. For people who are diagnosed with COVID-19, their immediate financial concerns will be met, and they can focus on getting well again without financial stress.