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SYDNEY - Debt-laden Australian households are finding it harder and harder to save as more of their earnings are swallowed up by mortgage and credit card payments, a survey reported today.
The quarterly survey of 1200 households by ING Direct and the Melbourne Institute found 46 per cent of respondents had managed to squirrel away some savings in the past three months. That was down from 49 per cent in the first three months of the year.
"The piggy bank's looking significantly slimmer than 12 months ago, when 55 per cent of families were managing to put away some cash," said Michael Smolders at ING Direct.
"We've seen a rise in the number of families who can't seem to make ends meet and managing the family finances is a tough day-by-day proposition for them," he said.
"A year ago less than 4 per cent were running into debt and that figure has now risen to almost 7 per cent."
With household debt at record levels, some 7 per cent of families were using between half and all of their income to service debts, up on 5 per cent in the previous quarter.
Nationally, one in four families cited repaying debts or bills as a reason for saving, up from 17 per cent three months ago.
That increase could in part be due to speculation about higher interest rates, following three rate increases last year. Financial markets are fully pricing in a quarter percentage point rise in the 6.25 per cent cash rate by year-end.
"People tend to pay a lot more attention to their mortgage, credit card and bank balance in this climate," said Mr Smolders.
- REUTERS
