How black tax and rising costs are squeezing South Africans

Black tax and rising costs are squeezing the sandwich generation as South African families try to look after their parents as well as their children, and often their extended family as well.

Rising costs are forcing families to stretch every rand, but small shifts in planning and spending can make survival possible, Niresh Gopichand, risk director at Atlas Finance, says.

“For many South Africans, the salary that comes in at the end of the month must stretch across generations. Between raising children, supporting ageing parents and carrying the unspoken weight of black tax, little remains once the basics are covered.

“Now, with electricity costs increasing by 68% and water by 50% in just a few years, according to the Competition Commission’s Cost of Living Report (2025), the squeeze is becoming unbearable.”

Gopichand points out that this is the daily reality of the sandwich generation, caught between two sets of financial dependents, their children and parents and in some cases grandparents too. The percentage of households supporting multiple generations increased from 41% in 2024 to 44% in 2025, according to Old Mutual’s 2025 Savings & Investment Monitor.

“The biggest risk right now is not always the large expenses we plan for, but the small, unexpected ones. A sudden doctor’s visit or burst geyser can topple a fragile budget and trigger missed payments on essentials.”

ALSO READ: Black Tax: A heavy burden on sole breadwinners

Survival tips for the sandwich generation to survive black tax

Yet while the pressures are real, families can take small, practical steps to stay afloat, he says.

He has these survival tips for the sandwich generation:

Face the pressure head-on

The data proves that you are not alone, with many families going through the same struggles as you do. Start with a budget audit and list every income and every expense, especially utilities. Writing it down creates clarity and is the first step to regaining control of your finances.

ALSO READ: Black tax survival guide: Getting your financial groove back

Talk openly about black tax

Black tax often goes unspoken, but silence makes it a heavier burden to bear.

Have honest conversations with your parents and siblings about rising costs. Could contributions be shared differently, like a sibling taking over the electricity bill directly?

Adjusting support does not mean abandoning family. It is a survival strategy.

Tame runaway utilities

With utilities such as electricity and water swallowing incomes, small actions can add up. Prevent utilities from running away by:

• Tracking electricity use on prepaid apps.
• Moving energy-heavy tasks like ironing to off-peak times.
• Swapping just a few bulbs for LEDs.
• Fixing leaking taps or toilets quickly and reusing grey water.

ALSO READ: Black tax is hitting a generation regardless of skin colour

Outsmart food inflation

Groceries are one of the hardest-hit areas, but this is what you can do to help keep your grocery bill under control:

• Plan meals and shop with a strict list.
• Opt for store-brand basics such as maize meal or rice or buy essentials on specials.
• Bulk buy non-perishables with friends or neighbours to unlock savings.

Cut hidden expenses

Scan your bank statement and budget for small deductions. A gym you do not use or a streaming service you hardly watch can eat into your budget. Cancelling R50 here and R80 there could free up money for higher utility bills.

ALSO READ: Funding the family: Black tax and the ‘sandwich generation’ are on the rise

Use loyalty cards as much as you can

Many supermarkets and retailers offer loyalty programmes that give instant discounts or cashback. These small savings add up over time if you swipe consistently.

Compare which stores give the best benefits for the items you buy most and avoid letting unused points go to waste. Even shaving R20 off your grocery bill every week is money that can cover rising utility costs.

Celebrate the small wins

Every step counts. Cutting your electricity by 10% or sticking to your grocery budget is progress. Put even R50 of those savings aside to build a small emergency cushion.

“We cannot stop prices from going up, but we can change how we respond to them. Small shifts, such as talking openly about black tax, cutting hidden costs, responsible borrowing or using loyalty cards can make the difference between sinking deeper into debt and keeping your family afloat,” Gopichand says.