Some startling findings about how Australians are coping financially during the Covid pandemic have been revealed in a new report.
The Commonwealth Bank analysed its customers’ account data and found the median savings balance was down a mere $100 in September, compared to the same month last year when the health crisis was in full swing.
But that average balance – not disclosed in the report – was still 66 per cent higher than in September 2019 before the health crisis erupted.
CBA’s head of financial wellbeing Ben Grauer said that indicated “a persistence of precautionary savings behaviour during the pandemic”.
Up until April, Australians had been consistently pocketing more cash than they were spending but that trend reversed in May.
Consumer sentiment reached an 11-year high in April, bouncing off a 10-year low at the beginning of the pandemic.
And by September, the average Australian’s annual cash inflow had risen by $3100 but was outweighed by a $4900 surge in outflows.
John de New from the Melbourne Institute put that down to an economic recovery in the early months of this year in response to pent-up consumer demand.
Despite the spending spike, savings balances still remained high, he said.
“The data should be interpreted as a sign of a healthy economy rebounding with increased consumption and confidence,” Professor de New said.
Overall, the report concluded the average Aussie had a financial wellbeing score of 50.1 out of 100, as of September this year.
Surprisingly, the score was lower two years earlier at 47.3.
Mr Grauer said the results were encouraging to see and may be a surprise to some.
“A range of macro and micro economic factors during the pandemic all help to explain this increased and sustained level of financial wellbeing compared to pre-Covid,” he said.
“Aussies across the country were limiting how much they consumed and increasing how much they were saving given the uncertainty at the time, all while being supported with government initiatives such as JobKeeper and JobSeeker.”
Another surprising finding was that despite enduring heavy restrictions and lockdowns, Victoria and NSW fared well, bested only by the ACT.
The territory’s score was 53, Victoria just a touch lower at 52.6 and NSW 49.9.
South Australia ranked fourth (49.4), followed by Western Australia (49.2), Tasmania (48.5), Queensland (46.5) and the Northern Territory (46).
The report is based on a Melbourne Institute scale comprising five major components that measure financial wellbeing: financial freedom, control, security, and meeting ongoing obligations now and into the future.