Middle-aged South Africans – aged roughly between 40 and 60 years – show lower levels of confidence in their finances than their older and younger counterparts, pointing to the heavier financial burdens this generation faces.

This is one of the findings of a new study by Sanlam, the 2023 Sanlam Financial Confidence Index, released last week, which surveyed 1 500 South African adults with a monthly income of R1 000 or more.

The survey used three key behavioural finance indicators to assess overall financial confidence:

Financial determination
Financial resilience
Financial well-being

The Sanlam study found that, overall, only 17% of respondents were satisfied (“not unhappy”) with their financial circumstances, and that only about a third (35%) trust their financial abilities. Respondents aged 40 to 60 displayed the lowest self-trust.

It found that, although no age group displayed a healthy level of financial well-being, the youngest (20 to 29-year-olds) and oldest (60+) respondents showed higher levels of well-being than middle-aged respondents.

The “Sandwich Generation” refers to people who care for and financially support their children and their parents simultaneously, and they generally fall in the “middle” age group. Members of the cohort typically have heavier financial responsibilities, such as a mortgage and education costs. These responsibilities tend to trap them in a situation where opportunities for self-advancement are limited.

“There is evidence that financial confidence decreases with age, and picks up again in the later years of life,” the Sanlam report says. “The major predicament the Sandwich Generation faces is that the financial strain placed on them prevents them from saving adequately for retirement, ultimately perpetuating the vicious cycle of financial dependence.

“People at this stage of their lives also start to re-evaluate or question choices and decisions made earlier in life. This life stage is also when we see the largest increase in people being self-conscious or afraid to talk about money. From the 50s onward, the burden of some responsibilities lifts and confidence starts to build again.”

The survey pinpointed a lack of financial education in the older age groups.

Sipho Mncwabe, the head of adviser transformation at Sanlam, said: “This highlights the need for far greater levels of financial education and advice in order to build self-trust. South Africans have multiple avenues available for boosting their financial management abilities, such as reading materials from dependable sources and engaging a reliable financial adviser.”

The annual Old Mutual Savings and Investment Monitor has also made a study of the Sandwich Generation, which consists mainly of Generation Xers. In the 2023 report, 43% of respondents had child and adult dependants, up from 31% five years ago. Its findings echo those of the Sanlam survey: respondents aged between 30 and 49 years had a lower average level of financial confidence (5.9 out of 10) than those aged between 18 and 29 (6.9) and those aged 50 and older (6.1).

The Sandwich Generation problem is not unique to South Africa. A recent study by US insurance aggregator Policygenius found that two out of three (66%) members of the Sandwich Generation – Americans with at least one living parent age 65 or older who are also raising or financially supporting children – feel “very stressed” or “somewhat stressed” about meeting their financial obligations over the next 10 years. While 36% expected that financially supporting their parents would cost just as much as financially supporting their children over the next five years, 16% expected that supporting their parents would cost even more.

PERSONAL FINANCE