How Generational Divides Shape South Africa’s Income Landscape
How Generational Divides Shape South Africa’s Income Landscape
South Africa’s income landscape is changing, but not equally for everyone. The Personal Finance Research Division of the Bureau of Market Research’s latest report on Personal Income Estimates for South Africa, 2020–2025, offers a compelling generational lens on how different age cohorts are participating in and benefiting from the economy. The findings reveal stark contrasts in income distribution, shaped by historical legacies, education, employment, and geographic location.
Why generational analysis matters? Generational categories, such as Generation Z, Born-Free Millennials, Generation X, and Older Generations, are increasingly relevant in South Africa’s socio-economic discourse. While these labels originate from Western contexts, they have been adapted locally to reflect the country’s unique post-apartheid trajectory. Understanding income through this lens helps unpack intergenerational inequality, labour market dynamics, and financial resilience across age groups.
Generation Z: Many in number, few in opportunity
Generation Z (aged 15–27) makes up nearly a third (30.3%) of the adult population in 2024, but their contribution to income is disproportionately small at just 7.4% of cash flow income. This generation is still in transition: many are studying or completing secondary education, while others face the harsh reality of youth unemployment. Only one in five (19.9%) are employed, and among those, income is largely concentrated in wages and salaries. A staggering 76% of this cohort falls into the very low-income bracket. Although only 7.2% have tertiary qualifications, this small group contributes nearly 29% of Gen Z’s total income. The evidence is clear: education opens doors, but too many young South Africans still face barriers to both quality schooling and meaningful employment.
Born-Free Millennials: Entering the economy, but unevenly Millennials (28–43 years), often referred to as the “Born-Free” generation, are beginning to consolidate their presence in the economy. They account for 35.9% of adults and generate 36.2% of income, showing a closer balance between their demographic weight and economic contribution. Over half (52.8%) are employed, and those in work generate almost all (94%) of the generation’s income. Wages and salaries dominate as the primary income source (80%), while investment and entrepreneurial income remain limited. Yet beneath these averages lies inequality: 40.4% of Millennials are still in the very low-income bracket, and nearly half (46.9%) are unemployed or economically inactive. Just 16.7% of Millennials hold tertiary qualifications, but they earn almost half (48.5%) of the group’s total income. This generation is beginning to break into middle- and high-income categories, but their economic story is one of uneven progress.
Generation X: Peak earners, carrying dual burdens
Coming of age during South Africa’s democratic transition, Generation X (aged 44–59) benefited from expanded access to education and formal employment. Generation X stands out as the country’s financial powerhouse. Representing 20.4% of adults, they account for 35.6% of income. This generation is in its peak earning years, with over half (55.1%) employed and those employed generating 90% of their cohort’s income. They have the highest levels of tertiary education across all generations (17.9%), with these individuals contributing 58.4% of total income. Wages remain dominant, but investment income is becoming increasingly important, with almost 20% citing it as their main source. Many in this group are part of the “sandwich generation”, being responsible for supporting both young and old children (many of whom struggle to secure employment) and ageing parents. While they enjoy financial maturity and diversification of income, they also shoulder significant intergenerational financial pressures.
Older Adults (60+): Retirement realities and inequalities This cohort lived most of their adult lives under apartheid, with Black South Africans largely excluded from formal employment, education, and asset accumulation. Older adults, aged 60 and above, make up just 13.3% of the population but account for 20.8% of total income, largely due to pensions (62.6%) and investment returns (50.6%). However, beneath this relatively strong position lies deep internal inequality. A majority (66%) depend on social grants as their primary income source, while a very small elite (just 1.9% of the group) generates more than half (53.7%) of the cohort’s total income, reflecting the concentration of wealth among a few. Despite low levels of tertiary education (13.3%), those with higher qualifications contribute nearly half of the cohort’s income. This illustrates how structural exclusions from quality education and asset ownership under apartheid continue to affect retirement outcomes today.
Cross-generational patterns
When viewed together, these generational profiles highlight the powerful role of history, education, and geography in shaping South Africa’s income distribution.
The structural legacy of apartheid continues to influence who has access to skilled jobs, financial assets, and stable pensions. Youth unemployment severely limits the ability of Gen Z and younger Millennials to participate in the economy, while education quality gaps mean that qualifications do not always guarantee income mobility. At the same time, intergenerational financial pressures, where Gen X and Millennials support both older parents and unemployed younger relatives, constrain wealth accumulation across households. Income inequality is thus not only an intergenerational issue but also highly pronounced within each generation.
For sustainable and inclusive growth for the country, every generation needs the opportunity to participate meaningfully. That means creating jobs for the youth, strengthening upward mobility for Millennials, supporting Generation X to build assets, and ensuring dignity for older adults.
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