Rainy day crisis: One in five has less than $1000 in cash savings

ONE in five Australians have less than $1000 in cash savings and many will struggle once government support payments are wound back, a new report shows.

ME Bank’s latest biannual Household Comfort Report found the COVID-19 pandemic had left one in three Australians worse off.

But, in an unexpected positive, lockdown had allowed some to drastically build on their savings. The report, which surveyed 1500 households in June, revealed:

• 20 per cent have less than $1000 in cash savings.

• 34 per cent have less than $5000 in cash savings.

• 9 per cent of mortgage customers are unable to meet their repayments on time.

• 65 per cent of renters who pay more than 30 per cent of their income have experienced rental payment stress.

• 57 per cent of households spent less than they earned – the highest level ever in the report’s nine-year history.

The report also found 40 per cent of households have benefited from federal government support schemes including JobSeeker and JobKeeper or accessed their superannuation savings early.

The report’s author, economist Jeff Oughton, said a lot of Australians were in dire financial circumstances.

“They are treading on the edge of a personal savings cliff with little if any cash savings fearing the scars of COVID and underemployment,” he said.

“They are also dependent on government support for the foreseeable future.”

The unemployment rate was 7.4 per cent in June and could reach double digits in the coming months.