Survey says 42% of Aussies have less than $1000 saved

Australians have an average of almost $50,000 sitting in savings, but that headline figure hides a much tougher reality for millions of households.

New Finder research shows 42 per cent of Australians have less than $1000 saved, leaving them with little financial room if the car breaks down, the fridge dies or another unexpected bill lands.

Finder estimates that amounts to about 9.2 million Australians.

At the same time, the average savings balance has climbed to $47,487 in August, up sharply from $31,841 in August 2023.

Australians surveyed also reported putting away an average $928 a month.

The figures show just how wide the gap has become between Australians building substantial cash reserves and those with barely enough savings to cover an emergency.

Finder money expert Richard Whitten said cost-of-living pressures had not stopped some households from building a sizeable financial buffer.

“Despite the high cost-of-living, some Australians are putting serious money aside and building a much stronger financial safety net,” Whitten said.

“Having money tucked away is the best way to stop a surprise car repair, medical bill or broken appliance from becoming a full-blown financial emergency.”

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For people struggling to save, Whitten said the starting point did not have to be a large amount.

“Even putting away a small amount each payday can start to create some breathing room,” he said.

“The biggest hack is making saving automatic. If you wait until the end of the month to see what’s left, there’s a good chance there won’t be anything.”

But Finder’s research also raises another issue for Australians who do have money in the bank: many don’t know what interest rate they’re receiving.

A separate survey of 1009 Australians found just 15 per cent knew exactly what their primary savings account was paying.

Another 34 per cent had a rough idea, while 35 per cent admitted they had no idea. Nine per cent kept their money in a transaction account and seven per cent did not have a savings account.

For older Australians holding larger amounts of cash, even a relatively small difference in interest rates can mean hundreds of dollars a year.

Someone with $50,000 in savings would earn an extra $500 a year before tax from an additional one percentage point of interest.

On $100,000, the difference is $1000.

Whitten said savers should check their rate regularly rather than assume their existing account was still competitive.

“Too many Australians are leaving money on the table by not paying attention to where they keep their savings,” he said.

“Interest rates can vary dramatically between savings accounts, so not knowing what you’re earning could be costing you hundreds of dollars each year.”

Headline savings rates can come with conditions, including introductory periods, minimum deposits, restrictions on withdrawals or requirements to increase the balance each month.

So when comparing accounts, it pays to look beyond the advertised rate and check how long it lasts, what happens afterwards and what conditions have to be met to earn it.

While an average savings balance of $47,487 might suggest Australians are sitting on a healthy cash cushion, the 42 per cent with less than $1,000 tells a very different story. For millions, there isn’t much of a cushion at all.

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