One third of Australians see incomes fall due to coronavirus

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on April 20, 2020
One third of Australians see incomes fall due to coronavirus

Photo by Tobias Moore on Unsplash

New research has revealed 33% of Australians have been negatively financially impacted since the start of the COVID-19 pandemic.

ME Bank's COVID-19 Financial Sentiment Snapshot surveyed 1,000 Australians to gain insight into how the population is faring financially during the crisis. 

Of those surveyed, 56% said their income had stayed the same while 11% reported an increase. 

While only a third of respondents had seen a fall in income, future sentiment was more negative, with 44% expecting the pandemic to have a negative effect on their household's finances in the long-term. 

Of those who said they are feeling negative about their finances during the pandemic, 63% said it was because they 'feel uncertain about the economy', 40% said it was due to their ‘inability to save money and get ahead’, while 38% attributed it to ‘negatively impacted investments and/or super’ – rising to 45% among Baby Boomers.

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                Many of those feeling negative about their finances blamed employment concerns: The findings suggest 29% of Australians were feeling ‘insecure about their job’, while 20% ‘have taken a wage cut’ and 17% have ‘lost their job’.

                Question: You said you’re feeling negative about your finances. Why is this?

                 

                Uncertainty around the economy

                63%

                Unable to save money and get ahead

                40%

                My investments and/or super have been negatively impacted

                38%

                Spending more on essential items

                35%

                I’m feeling insecure about my job            

                29%

                I have debts

                26%

                Unable to achieve my financial goals e.g. buy a home, take a holiday

                23%

                I’ve had to a take wage cut / my income has been reduced

                20%

                I’ve lost my job

                17%

                I have closed my business or about to

                2%

                Other

                5%

                Source: ME Bank

                However, of those who said their incomes had either stayed the same or increased, 47% said they were saving more than before the pandemic.

                Of those with affected incomes, 34% said they were saving more. 

                ME Money Expert Matthew Read said many Australians are discovering the difference between essential and non-essential purchases and spending. 

                “Many households tend to put money aside as soon as they feel financially uncertain,” Mr Read said.

                “Having a financial buffer is a good idea as it provides peace of mind when it comes to paying bills, essentials, rent or a home loan.

                "One saving grace of staying at home is that we’re spending less on activities such as going out to dinner or taking holidays. For some, the lockdown is forcing us to save.”

                Among the Australians who saw a fall in income, 72% were choosing to cut out unnecessary expenses to deal with the change, 29% have sought government assistance and 24% have drafted a personal budget.

                Mr Read encouraged all Australians to use this time as an opportunity to take stock of their finances. 

                “If you have a little extra time on your hands at home, take advantage of it and review your finances and personal budget," he said.

                "It pays to focus on what you can control and taking stock of where your money is going now may really help your financial wellbeing in the future.”

                Question: You said your income has decreased, what have you done to manage this change?

                 

                Cut out unnecessary expenses

                72%

                Sought assistance from the government e.g. benefits

                29%

                Drafted a personal budget

                24%

                Saved more to create an emergency savings buffer

                19%

                Sought assistance from family or friends e.g loans or free accommodation

                13%

                Switched or shopped around service providers e.g. power, gas, internet etc

                11%

                Sought assistance from my bank e.g. paused home loan or credit card repayments

                9%

                Switched or shopped financial products e.g. home loan, credit cards, savings accounts

                8%

                Other

                4%

                Source: ME Bank


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                Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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