This marks the third consecutive quarterly decline in household savings ratio, as household spending continues to outpace the growth in household income. 

The June 2022 quarter reading of 8.7% is the first single digit reading since the March 2020 quarter of 9.7%.

ABS Head of National Accounts Sean Crick said households were continuing to save but at a declining rate over the past three quarters.

"While the 8.7% household saving ratio was the lowest since the start of the COVID-19 pandemic, it remains above pre-pandemic levels," Mr Crick said.

ABS noted the strength in compensation for employees which increased 2.4%, driving a 1.0% increase in household gross disposable income.

At the same time, household spending rose 2.2% for the June quarter, driven by spending transport, hotels, cafes and restaurants.

"Households increased spending on domestic and international travel as COVID restrictions further eased and international borders remained open. While spending on transport grew strongly, households were still only spending two thirds of what they did pre-pandemic," Mr Crick said. 

Aussies had previously stashed record amounts of savings buffers in deposit and home loan offset accounts throughout COVID as an opportunity to get ahead on mortgages

Partially as a result of the lift in spending, overall Gross Domestic Product (GDP) rose 0.9% in the June quarter. 

The result lies in the middle of forecasts made by major bank economists, with the likes of ANZ anticipating a 0.8% increase, while Westpac expected GDP to increase 1.1% across the quarter. 

Cost of living pressures increase financial stress amongst Aussie workers

Despite an increase in spending, AMP’s 2022 Financial Wellness report revealed approximately three million Aussie employees are experiencing either moderate or severe financial stress, near doubling 2020 figures.

Surveying more than 2,000 Aussies throughout June 2022, AMP revealed women, single parents and part-time workers are experiencing the most financial stress.  

AMP’s General Manager Member Engagement Stephen Owen said following an emotionally unsettling three years, we’re now facing rising interest rates, general cost of living pressures, a property downturn and jittery investment markets.

“It’s no surprise we’re more financially stressed than ever,” Mr Owen said.

“But there are reasons to be optimistic – unemployment is at historic lows, our economy is in relatively robust shape despite inflationary pressures, and new flexible ways of working are seemingly here to stay.”

Mr Owen notes rising stress has also been a catalyst for many Australians to engage with their finances and actually take control.

“More of us are recognising that simple steps such as setting financial goals, establishing a budget and accessing credible online educational resources can have a positive impact on financial peace of mind,” he said.


Advertisement 

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

Savings Maximiser (<$100k)

    010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • Earn up to 5.40% pa by depositing $1,000 in the previous month
    • No account fees
    • Easy access to your money

    Saver Account (<$250k)

    • Earn up to 5.40% pa by depositing $1,000 in the previous month
    • No account fees
    • Easy access to your money
    4000$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

    Savings Account (Amounts < $250k)

    • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
    05001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • Maximum Age - 24

    Goal Saver

    • Maximum Age - 24
    02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    No monthly fees
    • Download the App to open your account
    • Get better visibility of your spending within App!
    • Deposit $200 per month to activate bonus interest
    No monthly fees

    Save Account

    • Download the App to open your account
    • Get better visibility of your spending within App!
    • Deposit $200 per month to activate bonus interest
    0200$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • No fees or penalties for withdrawing money
    • Savings guaranteed up to $250,000
    • Maximise your savings and reach your goals faster with Auto-Savings

    Bonus Saver Account (Amounts < $250k)

    • No fees or penalties for withdrawing money
    • Savings guaranteed up to $250,000
    • Maximise your savings and reach your goals faster with Auto-Savings
    010000$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 March 29, 2024. View disclaimer.

        Image by Karolina Grabowska via Pexels