Which Australians have $40,000 in savings?
This week I was completely stunned when a press release landed on my (virtual) desk proclaiming that the ‘average’ Aussie had $40,000 in cash in the bank.
The figure, published by comparison website Finder, comes from a nationally representative sample of more than 1,000 Australians and is up 75% since March. It’s also at an all-time high since the company started tracking savings levels in May 2019.
Forty thousand? The big four-oh? Who are these mythical beings with a huge pile of money in the bank? Do they churn their own butter and grow their own lettuce? have they not been to Europe this year?
It strikes a similar chord to the statement by bank chief executives last week that there were still no signs that borrowers were feeling the stress of higher interest rates, and the majority of customers have months of trouble. advance on their mortgage payments. Oh good?
Australia is in a cost of living crisis, with inflation at a 21-year high of 6.1% – and likely to rise by the end of the year – and a series of back-to-back hikes in interest rates that have put pressure on homeowners who haven’t been lucky enough to lock in their mortgage rates during pandemic record lows.
Rents are at record highs in city centers and have increased at astronomical rates in regional towns. Energy prices are also at record highs, partly thanks to the war in Ukraine. Even the humble can of beans, once a cheap staple, is 20% more expensive.
I have savings in the bank – less than $10,000 – but only because I took out some equity in my home loan when refinancing earlier this year to fund some renovations. Without this privilege, I would probably be in the same position as many other people my age with maybe a few thousand savings. That’s far from $40,000.
I do not question the reliability of the data, nor the honesty of the CEOs of the banks (although…). It is common knowledge that Australians have been saving like demons during the pandemic, with the Reserve Bank saying household savings have increased by $260 billion.