New research commissioned by buy now, pay later (BNPL) service Openpay found that over 50% of Australians have delayed essential spending due to the COVID crisis.

The survey of 1,000 people living in Melbourne, Sydney and Brisbane found that 61% of those living in Sydney and Melbourne have limited themselves to essential spending only, compared with half of those living in Brisbane.

Over 60% of Australians are using BNPL services to take care of essential spending such as healthcare (60%) and car repairs (31%), while one in ten are using BNPL to pay for their groceries and education expenses. 

Key findings from the Openpay report:

  • Two-thirds of respondents from Melbourne and Sydney, and 56% from Brisbane reported using less cash than they were six months ago;
  • 31% of respondents in each of Melbourne, Sydney, and Brisbane reported having at least one BNPL account;
  • 22% of Australians surveyed said they have put off spending on essential dental work due to economic difficulty or fear;
  • Deferred spending on holidays is at an all-time high of 57%;
  • Suspended home renovations and improvements see an increase of 29%; and
  • The research showed that Australians were using their BNPL services to pay for clothing (34%), home improvements (22%) car repairs (19%)

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance

High Interest Savings Account (< $250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace

Savings Account (Amounts < $250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
*Rate varies on savings amount
  • Deposit $500 per month to get bonus interest
  • No balance growth needed or card transactions necessary.
  • Tiered bonus rates apply. Earn our best rate on your first $100k. (TMDs at ubank.com.au)
  • 5.50% p.a. available on total savings up to $100K.
  • 5.00% p.a. applies to savings between $100K-250K.
*Rate varies on savings amount

Save Account (>$100,000)

  • Deposit $500 per month to get bonus interest
  • No balance growth needed or card transactions necessary.
  • Tiered bonus rates apply. Earn our best rate on your first $100k. (TMDs at ubank.com.au)
  • 5.50% p.a. available on total savings up to $100K.
  • 5.00% p.a. applies to savings between $100K-250K.
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month

Savings Maximiser (<$100k)

  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
40501$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Earn up to 5.25% p.a. interest on balances up to $1M. T&Cs apply.

Reward Saver (< $1M)

  • Earn up to 5.25% p.a. interest on balances up to $1M. T&Cs apply.
05001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

Goal Saver

    0200$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

    Bonus Saver Account (Amounts < $250k)

      010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
      For customers aged 14-35 years
      For customers aged 14-35 years

      Future Saver Account ( < $50k)

        010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

        Boost Saver

          Important Information and Comparison Rate Warning

          All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of July 16, 2024. View disclaimer.

          It comes as BNPL services have boomed during the pandemic, with the report revealing nearly a quarter of people who held a BNPL account in Melbourne and Sydney had only started using them since the outbreak of COVID-19. 

          Of the 1,000 Australians surveyed, one in three believe they will return to pre-COVID spending habits within the next six months, while a third think it will take between six and 12 months.

          One-fifth were more pessimistic, believing it will take between one and two years. 

          Georgina Whalley, Chief Marketing Officer Global at Openpay, said frivolous spending is a thing of the past because of COVID's impact on our personal finances.

          "Despite this, essential items still need to be paid for and as such, we’re pleased to be able to offer Australians a ‘Buy now. Pay smarter’ option which is a more sensible, and interest-free way to pay for essentials, including healthcare and dental (for us and our pets), as well as home and car repairs during these trying times," Ms Whalley said.

          “Using Openpay for purchases allows people to manage their money more responsibly by spreading out payments. With a range of plans, essential purchases don’t have to be put off and nor does any interest have to be paid.

          "Given that Australians are even worried about spending when it comes to their teeth, with 22% of those surveyed saying they have put off spending on essential dental work due to economic difficulty or fear, BNPL is a means of ensuring our health isn’t left to suffer”.

          Overall, the survey found Melburnians are the hardest hit financially with 38% of them stating they had used a BNPL service within the past week, compared to those in Sydney (32%) and Brisbane (24%).

          Nearly half of Melbournians (45%) said they use a BNPL service weekly or more often, versus over a third in Sydney (34%) and Brisbane (22%).

          The report also found that over half of respondents said spending on luxuries like upgrading or replacing furniture, home improvements or renovations and, unsurprisingly, holidays, are having to wait.