Login
iscover
The rising cost of groceries, energy and fuel are forcing consumers to dip into nest eggs, a survey finds.
Newsletter
One in four households raids savings to make ends meet
29 June 2023
•
10 minute read
Almost 50 per cent of households are saving less than usual due to rising living costs while one in four is raiding the piggy bank to make ends meet, according to a survey by website Compare the Market.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The survey found 61 per cent of households are only just getting by as prices soar, with the cost of energy, groceries and fuel topping the list of concerns.
The latest inflation data from the ABS, released yesterday, showed annual headline CPI to the end of May at its lowest in more than a year at 5.6 per cent, down from 6.8 per cent in the 12 months to April.
However, the prices of key items such as food (up 7.9 per cent) and housing (up 8.4 per cent) continued to increase above the overall rate.
The ABS said rents were also increasing and the price of materials was keeping building costs high, while key contributors to the food increase were bread and cereal products (up 12.8 per cent), and dairy and related products (up 15.1 per cent).
Compare the Market's general manager of money, Stephen Zeller, said the report held a mirror to a nation dealing with surging inflation and cash rate rises.
“There has been unprecedented financial change in the last 12 months and unfortunately the turmoil doesn’t look likely to end anytime soon,” Mr Zeller said.
“A $500,000 variable mortgage holder has already seen an extra $1,209 added to their monthly repayments since the RBA started chasing its inflation target in May last year.
“On top of that, we’re expecting electricity price hikes of up to 25 per cent for those on default plans, when the new Default Market Offer and Victorian Default Offer take effect on 1 July.
“With households getting hit at every corner, it’s no surprise 94 per cent say they’ve felt the difference.”
The cost of groceries was the biggest concern for Australians, with two-thirds of those surveyed anxious about their trip to the supermarket.
Rising electricity prices were another headache as well as the cost of fuel, although the ABS data for May showed an 8 per cent decline in bowser prices over the past 12 months.
Figures from the Australian Energy Regulator yesterday revealed a 19 per cent jump in the number of electricity customers participating in hardship programs in the first three months of this year.
Mr Zeller said overall, 26 per cent of households admitted their savings were going backwards with renters and single parents more likely than most to be dipping into nest eggs. Around half of respondents said they had reduced their usual savings rate to cover everyday costs.
The survey also revealed that Millennials and Gen Zers were more likely than previous generations to get help from their parents to purchase a home, as saving for a deposit became tougher.
“While each generation has faced different hurdles to homeownership, broad consensus is that young people today have it the hardest as climbing house prices continue to outpace the size of deposits,” Mr Zeller said.
Compare the Market’s Household Budget Barometer surveyed 3,024 Australians, Canadians and Americans and the samples are nationally representative in age, gender, location and income.
You need to be a member to post comments. Become a member for free today!
