More than half of working South Africans are over-indebted. “Essentially, after deductions for debit and garnishee orders, along with monthly instalments for other debt, the money they are left with is not enough to cover the rest of the month.
Financial advisory firm NMG Benefits has partnered with financial services provider EmpowerFS to bring a programme called Salary Saver to the struggling South African working class. Lettesha Pillay, Head of Business Development at advisory firm, NMG Benefits, says that Salary Saver does exactly what its name implies: it helps save people money and makes their salaries last longer throughout the month.
“The programme presents affordable, easy to implement solutions for individual debt situations. Its financial professionals analyse the reasons for over-indebtedness, suggest clever alternatives, and intervene where necessary.”
Pillay notes that while employees cannot access the programme independently of their employers, the big drawcard is that it does not cost either party a cent. Even so, the business model underpinning the services and products being offered ensures that the programme is sustainable and can continue to improve participants’ financial and mental wellness over the long-term.
One of the first things that Salary Saver addresses is ‘stacking’ of funeral policies. According to the Financial Sector Conduct Authority (FSCA), many South Africans have multiple policies – often even from the same insurer. This often means that they are overpaying for the cover they have, and that they are paying fees and commissions on each policy – both of which are unnecessary and expensive.
Consolidating stacked policies into one policy that effectively covers the main member’s family and extended family significantly reduces these monthly costs. In addition, Salary Saver offers benefits like life cover of up to R1 million without any underwriting and with premiums that compare favourably to equivalent products in the market. “Salary Saver’s increased cover, extra benefits, and reduced costs help members to honour their financial responsibilities to their families and beneficiaries.”
Pillay says that another major source of financial pressure comes in the form of garnishee orders. “We often find that these orders do not comply with jurisdictional and other legal requirements. We also see that they are a result of reckless lending practices. The financial professionals that are part of the programme step in and negotiate with the creditors, with the aim of getting interest and fees written off and getting the capital amounts discounted as far as possible.”
Salary Saver also protects employees from predatory micro-lenders and loan sharks by making emergency cash assistance available. Essentially, this unique benefit is a short-term loan of a percentage of their salaries, with zero interest and zero fees, to tide them over in times of pressing need.
In terms of emotional benefits, as employees’ financial stress lessens, so too does their anxiety, fear and guilt. With empowerment through education and support, they regain control of their finances and feel less helpless. NMG Benefits employee Rachel Bhoola explains how Salary Saver improved her quality of life: “with the financial consult and expert advice I received through the programme, I changed my policies and now have significantly more cover for me and my family, saving R850 every month – that’s over R10,000 every year!”
“At NMG Benefits, our focus is on giving working South Africans access to better financial and wellness resources. With Salary Saver we are making a difference in the lives of 120,000+ South Africans through various employer groups,” says Pillay.
