Budget 2025: Consumers given a lifeline - make the most of it, say Liberty Financial Advisers

14-03-25 / Jane Khumalo

Budget 2025: Consumers given a lifeline - make the most of it, say Liberty Financial Advisers

Johannesburg - With a 0.5 percent VAT increase going into effect this year, and the limited impact of earnings tax brackets not moving, the economic effects will not be felt that badly for many.

"The series of interest rate increases over the past year may balance out any real negative effects from this small rise, but caution should be taken by consumers not to spend carelessly," says Liberty Wealth Adviser Carlo Gil.

Now is the time to stay focused

He says consumers should make a point to carefully monitor the impact of these changes none the less. The current VAT increase and lack of personal income tax adjustments which would affect salary increases suggest that inflation and cost-of-living pressures could affect disposable income, requiring careful financial planning for the year ahead and beyond.

"If you're planning to purchase a pricey item like a car, think ahead. There is another 0.5% VAT increase planned for next year as well."

A car still needs insurance, and day-to-day life still happens. This includes always being prepared and protected by way of insurance for you and your loved ones. "Bear this in mind and stay within your budget, even when you have a small windfall," he says.

While this budget has positive overtones, it doesn't offer any new incentives to put money away and there is no extra money being added by way of tax decreases for example, says Liberty Adviser Arvind Naik.

Naik notes that Government has budgeted substantially for infrastructure spend. Hopefully, he says, this will generate more employment prospects going forward.

"These are good signs for the future, and I would suggest making sure things like your retirement savings keep pace. The environment might seem a little tight right now, but what the government is saying here with the 2025 Budget is that you should plan ahead as well. Don't get left behind."