With debts down and savings up, Besa Deda looks at current trends and where we are choosing to save and spend.
The St.George-Melbourne Institute Household Financial Conditions Report found financial conditions were on the rise with eight out of ten households managing to add to their savings or at least making ends meet, the highest in nine months.
With more savings in the bank, Australians are hungry for higher returns for their savings, by investing in other asset markets such as real estate. The proportion of Australians holding investment property is at the highest ever recorded since the survey began in March 2001, rising to 23.3 per cent.
However seniors (aged 65 and over) were the only age group to report a decline in their financial conditions, dropping by seven per cent to 108.8 this quarter. The low interest rates could be impacting their savings plan as this age group tends to rely more on interest income.
So, what are we saving for?
- Holidays – more than half (60.7 per cent) of respondents are saving for holidays or travel.
- Saving for a rainy day – a precautionary number of us are saving for a rainy day (56.6 per cent).
- Christmas gifts – we’re also seeing nearly a third (32.6 per cent) of households put savings aside for Christmas presents.
- Big ticket items are part of the saving strategy with one-in-five people preparing to purchase a car (22.4 per cent) or expensive items for the home (20.3 per cent).
- We are using our saving to inviest with property investment up three percentage points to 23.3 per cent, the highest ever recorded since the survey began in March 2001.
The good news is the majority of Australians with debt continue to have very manageable levels. Most households report debt service levels of 10 per cent or lower, however this declined 4.9 percentage points from June to 61 per cent in September.
Call 3235 6701 to discover how St.George can help you to save.