Australians are preparing for the economic recovery phase of the COVID-19 period by building a savings war chest, with accounts holding significantly more funds than pre-pandemic.
Bankwest analysis of the past 12 weeks of savings account data found that median balances were up 45 per cent from the pre-COVID period (1 March) and up 56 per cent year-on-year.
The data was supported by the findings of a national Bankwest survey, which found that many Australians plan to maintain their new saving habits as the economy begins to recover.
Almost half of those surveyed (47%) said they were trying to save more money than usual, with respondents reporting they were more than twice (2.2) as likely to be saving than spending.
The results also uncovered vast differences in spending behaviours based on household income.
More than half (54%) of those in the $120-180k band reported they were saving more during the pandemic, compared to 41 per cent in the $40-80k range.
The most common reasons given by those saving more were: actively/deliberately saving due to uncertain times; fewer travel expenses/holidays; less eating out; and cancelled memberships.
About half (44%) of those surveyed expected reduced spending to continue post-pandemic, particularly in categories such as travel, eating out/take-away, public transport and clothing.
The trade-off in reductions, however, was an expectation from respondents that increased at-home spending would continue, such as bills for groceries, utilities, cleaning and gardening.
Bankwest Chief Customer Officer Paul Vivian said: “This time of uncertainty has made Australians think about their future and those who have the ability to do so are building their reserves.
“The shut-down period has given many people an opportunity to put some money toward a new home, a renovation, a car or even a dream holiday, once travel restrictions are lifted.
“The findings also suggest there are a lot of people intending to maintain their savings momentum, and it will be interesting if this is a long-lasting behaviour change.
“That could create a scenario that will be important to work through as a community, given the recovery of the economy and many businesses could hinge on people’s spending behaviour.”
The survey was conducted by Bankwest Ideas Lab Community, with 955 respondents from across Australia, comprising of customers and non-customers. The Bankwest Ideas Lab Community requires respondents to opt-in for participation and, as such, is not representative of the general population. Data has not been weighted.
Bankwest’s vision is to deliver brilliant customer experiences that matter and our purpose is to improve the financial wellbeing of our customers and communities. Bankwest provides personal and business banking solutions for more than 1.1 million customers across Australia. Our customers enjoy access to an extensive network of branches and business centres, direct and third-party distribution channels, agencies and electronic banking facilities, as well as 24-hour banking on the telephone, internet and the Bankwest App. Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit license 234945.