Australians are struggling to save money, with one in five of us having less than $250 in our savings accounts, according to new research.
The study, conducted by AMP Bank, also reported that one-third of Aussies had less than $1,000 in savings while one in five aren’t saving any of their monthly income.
More than a quarter (26%) don’t even have a savings account.
The research found people’s wages are being eaten up by everyday living costs, bills, school and daycare fees.
Males on average are better off than their female counterparts, having nearly 20% more money saved, while nearly a quarter of women (23%) and nearly a third of 18-24 year olds have less than $250 to their name.
Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory interest rates on the market.
*Data accurate as at 01 August 2020. Rates based on a savings balance of $10,000. Introductory bonus interest rate products not included. Sorted by total interest rates. Refer to providers' websites for bonus rate conditions.
AMP Bank CEO Sally Bruce said that since the global financial crisis, there’s been a decline in the savings rate.
“A number of factors have contributed to this including rising housing wealth until recently at a time of weak wages growth and ongoing increases in the cost of living. And with interest rates at record lows it’s little wonder Australians don’t have anything spare to put away, and what they do have saved is only growing slowly,” Ms Bruce said.
“For most Australians, having a pot of money to use when times are tough or to fund the nicer things in life such as a new home or a holiday can have a huge impact on health and morale as well as your wallet.”
What kind of #saver are you? A little bit of homework and a solid savings plan can go a long way towards setting you up for a healthy financial future. So take an interest in your interes #ausbiz Read more here: https://t.co/NyUr2TrUbQ pic.twitter.com/iOBOGfhqSU— AMP (@AMP_AU) June 24, 2019
Get interested in your interest rate
It can (quite literally) pay to be educated on your interest rate. The findings from AMP show that those who know what their interest rate is saved twice as much each month, compared with those that don’t know their interest rate.
Around 44% of Australians believe a higher interest savings account would get their savings back on track, while 41% believe a salary increase would also help.
Ms Bruce said it’s important for people to understand the benefits of interest.
“The more we can encourage Australians to take an interest in interest, the more they will be able to grow their wealth and reduce the impact of unexpected costs or afford the extra things in life they want,” Ms Bruce says.
The research coincides with the release of the Lowy Institute Poll for 2019, which reported that the majority (65%) of Australian adults remain generally optimistic about the economy and Australia’s economic performance in the world over the next five years.
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