South African households are poorer than they were in 1975, largely due to recessionary factors, according to the Momentum/Unisa Wealth Index for the fourth quarter of 2012.

Economists and scholars who compile the wealth index said on Friday that in real terms, the estimated average wealth of households was lower in 2012 than in 1975.

Their analysis indicates that real wealth per household on average decreased by 0.04 percent a year over the period, declining from R326 000 in 1975 to R287 000 in 2012.

A further breakdown shows that between 1975 and 1994, real net worth per household on average decreased by 1.8 percent a year.

“The decrease in the real net worth per household over the period 1975-2012 is a real cause for concern and policymakers, the private sector, trade unions and households themselves should all take responsibility in ensuring a larger emphasis on households’ asset accumulation,” said Bernadene de Clercq, the head of the personal finance research unit at Unisa’s Bureau of Market Research.

The report says that the impact of the 2008 economic recession on households was severe, taking five years of accumulation off their wealth, which “might force households to postpone their retirement or start saving more”.

The methodology for the index deviated from expressing wealth in terms of income as is usually done, but rather considered households as possessing balance sheets comprising assets and liabilities, which are checked against each other.

For example, the index said, many households were income-poor but rich in assets, indicating the importance of also monitoring household wealth to arrive at a more comprehensive understanding of the true financial health of households in the country.

In terms of the fourth quarter, collectively households experienced a second consecutive strong increase in their nominal wealth due to a strong increase in the value of household assets, despite mining strikes that dented confidence, mediocre domestic growth and a slow international economy.