What do the financial changes mean for your retirement
Regardless of the rand exchange or petrol price fluctuating, South Africa has experienced significant financial changes in the first quarter of 2018. This is specifically regarding the VAT increase from 14% to 15%, for the first time in 25 years. Furthermore, the repo rate has decreased to 6.5% and the home loan rate to 10%. We take a look at how these new financial changes will affect retirees going forward.
Regardless of the VAT increase there are certain items that will not be affected by the VAT increase, many grocery stores are helping individuals understand which items have a zero VAT rating with signs next to the affected items. The items not affected by the VAT increase include; maize meal, rice, brown bread, dried beans, vegetables, legumes, fruit, samp, vegetable oil, mielie rice, pilchards, eggs, dried mielies, milk, cultured milk, dairy powder blends, lentils and brown wheaten meal. On the other hand, you will notice an increase in light bulbs, sugary cooldrinks, plastic bags at the till, alcohol, cigarettes, and luxury items such as electronic devices and cosmetics.
Industry experts are saying that it is the buyers’ market in property this year. The decrease in the repo rate and the home loan rate helps already existing homeowners, whether retired or not, to save a small amount of money on monthly repayments. While new property owners trying to qualify for a home loan will find it a lot easier; this is a great prospect for those of you who are looking at purchasing retirement property as an investment.
It is vital for retirees to keep abreast of the financial situation in South Africa. Every little adjustment will affect your savings or your day-to-day living. Make the financial changes work in your favour as we take on the next quarter of 2018.