Save
Consumer savings reach historic highs
Australia’s savings rate has surged in 2020, with a collapse in consumer confidence leading households to pocket money at a time when the economy needs them to spend, new research has shown.
Consumer savings reach historic highs
Australia’s savings rate has surged in 2020, with a collapse in consumer confidence leading households to pocket money at a time when the economy needs them to spend, new research has shown.
According to IBIS World’s senior analyst, Matthew Reeves, household saving rates as a share of gross disposable income jumped from 2.7 per cent in 2019-20 to 7.9 per cent, with mortgage deferrals and rent relief providing a tailwind for savers.
Similarly, the $50 billion to date from the Morrison government’s JobKeeper and JobSeeker payments, which have seen real household disposable income rise by 3.4 per cent, has not led to a jump in spending.
However, despite government benefits, consumers continue to save as they worry about the larger economy.
“The COVID-19 pandemic may also have resulted in a higher household savings rate because of the steep decline in the sharemarket and other assets such as housing,” Mr Reeves said.
“Households rely on their savings to fund consumption post-retirement, particularly since the advent of widespread superannuation, they may be saving more to restore their wealth.”
Despite a gradual recovery, the senior analyst is expecting Australians to continue to save money.
“Household spending is expected to recover, provided that no significant new waves of infections are reported across the country. As the local economy continues to open up, especially in Victoria, the savings rate is likely to drop from the highs seen in the June quarter,” Mr Reeves explained.
“However, as with the post-GFC recovery, savings are likely to remain at elevated levels for at least the next three years. Consumers are likely to spend cautiously as they did after the GFC.
“Consumer spending patterns will be driven by the lasting effects of the virus which are expected to remain until a successful vaccine is produced.”
About the author
About the author
Save
6 tips to turn your financial resolution into reality
Following a year of record-low interest rates, a volatile stock market and consumers flocking to access their superannuation, a financial expert has prepared six tips for Aussies looking to get on top...Read more
Save
Tidal wave of cuts set to hurt savers
Savers continue to suffer from low interest rates, with two of the big four banks announcing reductions to savings rates. ...Read more
Save
Younger Australians struggle with financial future
Almost three in four younger Australians have admitted that they struggle to prioritise their financial wellbeing because thinking about money makes them anxious, new research has found. ...Read more
Save
Are we really a nation of savers?
Australians are more likely to have surplus due to COVID-19 restrictions than to be actively saving money, a financial planner has said. ...Read more
Save
1 million Australians are now out of work: ABS
Australian unemployment has cracked the seven figures, but green shoots are starting to emerge, official figures have shown. ...Read more
Save
5 tips to get financially fit
As the COVID-19 pandemic continues to impact consumers, Australians are being urged to focus on spending less and saving more. ...Read more
Save
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 researc...Read more
Is the market overheating; should ETFs take your fancy, and what’s happening to the low and middle income tax offset?
Listen now
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now
Save
6 tips to turn your financial resolution into reality
Following a year of record-low interest rates, a volatile stock market and consumers flocking to access their superannuation, a financial expert has prepared six tips for Aussies looking to get on top...Read more
Save
Tidal wave of cuts set to hurt savers
Savers continue to suffer from low interest rates, with two of the big four banks announcing reductions to savings rates. ...Read more
Save
Younger Australians struggle with financial future
Almost three in four younger Australians have admitted that they struggle to prioritise their financial wellbeing because thinking about money makes them anxious, new research has found. ...Read more
Save
Are we really a nation of savers?
Australians are more likely to have surplus due to COVID-19 restrictions than to be actively saving money, a financial planner has said. ...Read more
Save
1 million Australians are now out of work: ABS
Australian unemployment has cracked the seven figures, but green shoots are starting to emerge, official figures have shown. ...Read more
Save
5 tips to get financially fit
As the COVID-19 pandemic continues to impact consumers, Australians are being urged to focus on spending less and saving more. ...Read more
Save
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 researc...Read more
There is no articles in this category.
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
