In a recent 2013 report released by the International Transport Forum (ITF), South Africa has one of the highest levels of annual road accidents among 36 other global countries. This position is an annual cost of R300 billion to the South African economy in accident financial support claims.
The Road Accident Fund (RAF) provides compulsory cover to all users of South African roads, citizens and foreigners, against injuries sustained or death arising from motor vehicle accidents within the borders of South Africa. These lump-sum settlements are often made to claimants who are not financially literate enough to manage their finances in such a way that it sustains their family’s livelihood; particularly as some of the road accident victims may be unable to work again.
With this in mind, the Financial Planning Institute (FPI) and RAF have signed a Memorandum of Understanding (MoU) aimed at providing financial education to RAF claimants in a bid to protect them from mishandling their finances.
“The partnership entails providing financial literacy tools to RAF claimants through the FPI MYMONEY123™ programme, a financial education community outreach programme that aims to teach South Africans about the basics of personal financial planning to empower them to make sound financial decisions. Furthermore, the MoU provides both organisations with a chance to explore collaborative financial education and advocacy platforms on a national scale,” said FPI CEO, Godfrey Nti.
“We are proud to be associated with the RAF through their commitment to financially empower road accident claimants. Their commitment is closely aligned with our vision as an Institute, which is to provide financial planning for all South Africans through our CERTIFIED FINANCIAL PLANNER® professionals,” added Nti.
With increasing amounts of debt to manage, South Africans need to be more proactive in seeking various saving mechanisms to help them use their savings in a wise manner that assists them to ease and manage their debt burdens.
Statistics released by the Reserve Bank recently show that household debt as a percentage of disposable income was at a concerning 76% in 2013. This has eased somewhat from a high of 80% reached in late 2008.
Statistics like these underpin the importance of saving and financial planning, and encourages, in joint effort, the financial services industry to spearhead various saving initiatives. “We need to make saving a lifestyle all year round,” said Nti.
“We saw it fit to collaborate with an independent body that had the ability to provide objective financial planning tools that could empower our claimants to make wiser and sustainable financial decisions for the wellbeing of their families,” said RAF Chief Executive Officer, Eugene Watson.
“We look forward to a successful partnership that will allow us to jointly change lives by creating financially educated citizens, who through their development can further confirm the importance of financial planning.” concluded Nti.