Subscribe

Saving grace

Three in four Australian households are in a better financial situation than they were this time last year, a report shows.

The December 2012 St. George-Melbourne Institute Household Financial Conditions Report has found that despite some difficulties over the past year, close to 70 per cent of Australian households have started 2013 in a stable financial position or with savings in hand.

Chief Economist at St. George, Hans Kunnen explained that economic growth in 2012 enabled most people to save at least a little, although the motivations behind saving did vary.

“Over half the respondents erred on the side of caution listing ‘saving for a rainy day’ (53.4 per cent) and saving to pay down debt (43.5 per cent), while close to 60 per cent had holidays and travel at top of mind”, Kunnen said.

General Manager St. George Retail Banking, Andy Fell remarked that the report findings are consistent with feedback from the bank’s customers.

“It is great that a large proportion of people are still managing to save, which makes the outlook for 2013 positive”, Fell said.

"It’s also encouraging to see the ‘Great Australian Dream’ of buying your own home is alive and well”, he added.

In the report, 18.1 per cent of respondents cited putting down a deposit or buying a home as a motivation to save. Home renovation was also a motivation to save for 31.8 per cent of respondents in December 2012, up from 21.9 per cent at the same time in 2011.

The 25-44 year age group has maintained its position as the group who felt most able to save and whose financial conditions remained most stable during 2012.

Within this group are households with double incomes, as well as homeowners who have benefited from lower interest rates on mortgages and managed to save the difference.

Surprisingly, 42.7 per cent of Australians surveyed in December 2012 indicated that they are living ‘debt free’.