Understanding the link between financial stress and mental health

FINANCIAL insecurity is not only about depleted bank accounts, it chips away at psychological resilience. When people lack financial confidence, they carry an invisible burden that permeates every aspect of their well-being.

- MARION BORCHERDS

Sanlam’s Age of Confidence campaign shows that most South Africans will need to work until the age of 80 to retire comfortably. That sobering projection alone creates a heavy psychological strain. Added to this, our 2025 Sanlam Benchmark report found that 44% of households have already dipped into emergency savings simply to make ends meet, a clear sign of how fragile financial and mental resilience have become.

A study confirms the link; financial resilience is associated with an approximately 37% decrease in the occurrence of mental health disorders. Importantly, the study also shows that this relationship is mediated by life satisfaction and household expenditure. Put simply, when people feel financially confident, they are more resilient mentally, too. But when they feel financial stress coupled with the knowledge of being underprepared to retire, the strain shows up as persistent stress, which can manifest as anxiety, depression, sleep disruption, headaches, or even weakened immunity.

Living longer, not better

By 2050, 15.4% of the South African population will be over sixty. Living longer does not always mean a better quality of life. Many pre-retirees worry about whether they will cope with rising healthcare costs, as aging often comes with chronic conditions. Medscheme reports that 13% of people under fifty face chronic conditions. A major concern is having adequate healthcare in retirement.