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Aussies make cuts to spending as money worries increase
While most Australians plan to simply reduce their spending to manage the financial impact of COVID-19, over a quarter plan to access their superannuation in the next year, according to recent research.
Aussies make cuts to spending as money worries increase
While most Australians plan to simply reduce their spending to manage the financial impact of COVID-19, over a quarter plan to access their superannuation in the next year, according to recent research.
Recent research by Fidelity exploring the impact of COVID-19 on people’s finances indicates that worries about money have significantly increased since the COVID-19 crisis began.
The research, based on a survey conducted by CoreData in May, showed that 45.7 per cent of respondents felt that their worries about money had increased since the beginning of the pandemic.
Fidelity International managing director, Australia, Alva Devoy said the research found that Australians appeared to be making sensible choices when it comes to their finances through this period, however.
“Reducing discretionary spending such as eating out was the top choice for mitigating the impact of COVID-19, with 63.4 per cent saying they would do this over the next month to six months,” said Ms Devoy.
Just over half said they would reduce spending on essential items like food and clothing during the next one to six months.
The survey also compared what those in a good financial situation were planning to do versus those in a bad financial situation.
Ms Devoy said among those in a bad financial situation, there was a much higher percentage of respondents looking to reduce their spending on essential items.
These respondents also intended to cancel memberships or subscriptions and seek additional work or jobs.
“Worryingly, 26.1 per cent of people say they plan to take the opportunity to access their superannuation early in the next 12 months,” Ms Devoy said.
The survey indicated that, overall, 9 per cent of respondents planned to access their superannuation within the next month.
Pleasingly, Ms Devoy said there were few respondents planning to sell down assets, including shares and property.
“So, outside of the access to superannuation, the forced selling of assets is not problematic, but this is something we should keep an eye on as we monitor the impact of COVID on our economy,” she said.
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