More than one in four Australians do not have any savings in their bank accounts, while more than two-thirds are in debt, a shocking new survey suggests.
The troubling figures come during a period of relative economic strength with unemployment below four per cent, but suggest cost of living pressures have eaten up any financial security buffer for millions.
Compare the Market, which surveyed 1004 Australians in August, found 28.6 per cent of respondents did not have any savings in the bank, with Gen X struggling the most at 37.5 per cent.
By contrast, 23.1 per cent of Baby Boomers said they had no money in their nest egg, followed by Gen Z (28.6 per cent) and Millennials (26.9 per cent).
Of those who had savings, the median amount was $12,000.
Almost half had at least $20,000 in their savings, while 29.4 per cent had at least $50,000.
Debt is also beginning to crush most people, with 68.5 per cent reporting a debt burden.
About 40 per cent said they had credit card debt, 16.8 per cent said they owed money to Buy Now, Pay Later services, and about 10 per cent said they were behind on their mortgage payments.
A further 9.6 per cent are paying off a personal loan, 8.4 per cent are in debt to a family member or friend, and about one in 10 owe money to an energy or utility retailer.
Compare the Market’s Noemi Hadnagy said the numbers were concerning.
“We know that a lot of households already live pay cheque to pay cheque and if all their money goes towards everyday expenses, what does that mean if they fall on hard times?” she said.
“While there’s been a temporary pause of mortgage rate rises for a few months, we know that households across the country are continuing to struggle.
“Fuel prices are soaring past $2 a litre in some parts of Australia, we’ve been hit with higher energy prices, some of the nation’s biggest health insurers are increasing their prices from October 1 and the dollar just isn’t stretching as far at the supermarket as it used to.”
Ms Hadnagy said Australians had dipped into their savings to stave off the sweep of price hikes that had rippled through the economy.
The debt and paycheck pressures could soon get worse, with economists at Australia’s big four banks forecasting another Reserve Bank of Australia interest rate hike in early November.
This week’s sharper than expected spike in September retail sales could also put pressure on the RBA to lift rates to dampen inflation.