According to the Australian Bureaux of Statistics (ABS) Australian households are currently saving less than 3.2% of their income.
A massive drop since this time in 2021 when they were putting away more than 19% of monthly earnings.
The decline has been happening slowly and steadily over the past two years, statistics show, putting a considerable strain on home buyers trying to build up a decent deposit.
The ABS reported the household savings declined for seven consecutive quarters, most significantly since September 2021 & June 2023, reflected in the latest data:
* Sep-21: 19.3%
* Dec-21: 12.9%
* Mar-22: 11.3%
* Jun-22: 8.1%
* Sep-22: 7.2%
* Dec-22: 4.4%
* Mar-23: 3.6%
* Jun-23: 3.2%
Why the decline tho?
This sharp drop has been partly caused by the pandemic. In the lockdown years people spent less because they were stuck at home, so savings spiked. And, post-lockdown Australians engaged in 'revenge spending' reducing savings figures.
The data also reflects the high inflation we’ve experienced since 2021, which has forced consumers to spend more money out of necessity, just to buy the same items. Leaving less and less to put away.
Let’s hope things turn around soon.
🩵Mortgage Holders, does your money seem to be flying away?
If you’re struggling to make repayments, please get in touch so we can speak to your lender. Lenders tend to be more flexible with borrowers who get on the front foot about any financial problems they may be experiencing. So it never hurts to ask.