According to MyState Bank’s survey of 1,000 Australians, nearly one in three has been forced to dip into their savings, while one in 10 estimates that they have drained more than half of their life savings.
According to the research, paying for essentials such as groceries (39 per cent) and paying for household bills (39 per cent) are the biggest reasons why Australians are dipping into their savings during this time.
MyState Bank general manager, customer experience, Heather McGovern said that despite financial hardship assistance on the table from the government and banks, many Australians are still struggling to manage their finances.
“What started out as a health crisis has been felt in the hip pockets of many Australians across the country. While lockdown measures have helped some Australians into a better financial position, for others, it has left gaping holes in their household income.”
According to the survey, nearly one in five Australians has seen their household income decrease by more than a quarter, which will likely grow over the coming months.
“With financial support from the government winding back in September, many Australians are likely to feel the pinch even more. As a bank, we recognise the need to help our customers stay financially healthy during this time,” said Ms McGovern.
Ms McGovern said this is likely to have a flow-on impact on Australians’ spending in the future as savings goals will not be reached.
“The economic implications of COVID-19 have caused many households across the country to redirect their savings to the basic necessities, shelving their big financial goals and decisions, at least, for the time being.”
Almost a quarter of those needing to access their savings (23 per cent) reported those savings were originally being put towards a deposit on a first home, while one in five said the savings were going towards their retirement. A further 25 per cent of respondents were intending to put the savings towards a holiday.
Furthermore, more than four in 10 Australians (41 per cent) expect their finances to continue to be affected in the next six to 12 months by the coronavirus pandemic.
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