A recent survey has uncovered concerning financial trends among Australians, highlighting the lack of savings and increasing debt levels within the population. Despite relative economic stability with unemployment below four percent, the survey suggests that the cost of living has eroded financial security for many.
The survey, conducted by Compare the Market in August and involving 1,004 respondents, revealed that over one in four Australians (28.6 percent) do not have any savings in their bank accounts. Generation X appears to be the hardest hit, with 37.5 percent of respondents in this age group reporting no savings. Baby Boomers also faced financial challenges, with 23.1 percent lacking savings. Gen Z and Millennials had similar statistics, with 28.6 percent and 26.9 percent respectively.
Among those who did have savings, the median amount was $12,000, while nearly half had at least $20,000 saved, and 29.4 percent had a substantial $50,000 or more in savings.
Debt is another pressing issue, with 68.5 percent of respondents stating they had some form of debt. Approximately 40 percent reported having credit card debt, 16.8 percent owed money to Buy Now, Pay Later services, and 10 percent were behind on their mortgage payments. Additionally, 9.6 percent were paying off a personal loan, 8.4 percent were in debt to a family member or friend, and around 10 percent owed money to an energy or utility retailer.
Noemi Hadnagy, spokesperson for Compare the Market, expressed her concern over these findings. She pointed out that many households already live paycheck to paycheck, and if their income is primarily dedicated to covering daily expenses, it leaves them vulnerable if they encounter financial hardships.
Furthermore, Hadnagy noted that while mortgage rate increases have been temporarily paused, households continue to face financial challenges due to rising fuel prices, increased energy costs, and higher health insurance premiums. These factors, coupled with inflation, have caused financial strain for many Australian households.
The survey results indicate that Australians have been dipping into their savings to cope with the rising cost of living. With economists from Australia’s major banks forecasting another interest rate hike by the Reserve Bank of Australia in early November, and September’s unexpected spike in retail sales potentially leading to further inflation, the debt and financial pressures could intensify in the near future.
Originally posted at news.com.au