Budget 2026 - Stable for Government, Still Tight for Households

Budget 2026 stabilises SA’s debt, but slow growth and rising costs mean households still face pressure despite avoided tax hikes.

26 February 2026: For the first time in nearly two decades, South Africa’s national finances are showing signs of discipline. Debt is stabilising. The deficit is shrinking. In his budget speech, Minister Enoch Gondongwana said government has avoided major tax hikes. On paper, Budget 2026 is calm, controlled, and fiscally responsible. But while Treasury may be breathing easier, many South Africans are still holding their breath between paydays.

Head of National Debt Advisors, Sebastien Alexanderson, says while fiscal responsibility is crucial to avoid higher borrowing costs and economic strain, stabilising government debt doesn’t automatically ease pressure on household budgets.

“People hear ‘debt is stabilising’ and assume their monthly payments will magically ease. But households don’t run on GDP, they run on cash flow. If the money coming in hasn’t improved, pressure stays the same.”

He said the projected economic growth of 1.6% in 2026, inching up to 2% by 2028, was not nearly fast enough to meaningfully shift unemployment or boost household income.

In everyday terms, what it means is that job creation remains slow, income growth stays limited, and household pressure continues.

“You can feel it in the small things: the petrol top-up you postpone, the grocery items you swap out, the credit card you promise you’ll ‘catch up on next month,” said Alexanderson.

In a welcome shift, government withdrew R20 billion in proposed tax hikes, instead adjusting income tax brackets for inflation and increasing savings incentives, including a higher VAT threshold for small businesses, a R46,000 tax-free investment limit, and a R430,000 retirement deduction cap. The move prevents “bracket creep” from quietly eroding take-home pay.

“It’s not a cash windfall, but it does stop the silent squeeze where your salary increases on paper and your take-home pay doesn’t stretch any further,” said Alexanderson.

But the quieter increases still count, with fuel, alcohol, and tobacco costs rising and slow growth limiting jobs and salaries, consumers remain under pressure, Alexanderson said.

“We’re seeing more consumers using short-term credit simply to absorb rising living costs. For heavily indebted households, even modest increases filter quickly into monthly shortfalls.”

The key for consumers was to be proactive rather than reactive, he said, offering the following tips to help consumers stay ahead:

Use any tax relief wisely — channel small take-home gains into paying down high-interest debt or building an emergency fund.

Adjust for fuel increases — revisit transport costs and trim where possible.

Prioritise expensive debt — tackle credit cards and unsecured loans first.

Avoid short-term credit traps — don’t use payday loans to plug monthly gaps.

Leverage higher savings limits — boost tax-free or retirement contributions if you can.

Monitor your debt ratio — if most of your income goes to repayments, seek help early.

About National Debt Advisors:

National Debt Advisors is South Africa’s number one debt counselling company and is perfectly positioned to help South African consumers who are struggling with their finances become debt-free in under 60 months. NDA will negotiate with creditors for reduced monthly interest rates and extended terms – ultimately consolidating all debt repayments into one lower monthly instalment - whilst protecting consumers from harassment by creditors, securing their assets against repossession, and leaving them with more money left to live on. NDA will help South Africans gain their financial freedom.

Media enquiries:

Omega Ngema

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

WhatsApp: 0789033505