Under 20% confident returns are sufficient
Australians are concerned inflation will eat into their savings, and a quarter are saving $250 or less per month, a new survey shows.
According to a savings and investment survey commissioned by Savvy of 1,002 Australians in September, 43% were either unconfident or not confident at all that their investment returns would continue to outpace prices. A further 37% were neutral or unsure, and 19% were confident or very confident that their returns would be higher.
The findings come as ABS preliminary results show inflation rose 6.8% in the year to August, with new housing construction and fuel the biggest contributors. Prices are expected to rise further, the RBA forecasting core inflation to peak around 7.75% over 2022.
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The survey, which investigated the savings and investment habits of consumers, showed 24% save $250 or less per month. Almost one third (32.5%) save $750 or more, and 15% said they save between $251 and $500 each month.
Savings accounts were the most popular form of savings, used by over three-quarters (78%) of respondents. Superannuation came in second at 24%, and 19% of respondents said they invest in shares.
Savvy founder and CEO Bill Tsouvalas (pictured above) said even in times when the cost-of-living is rising, the strategy of ‘pay yourself first’ continues to be important.
“Though everything seems to be getting more expensive, now isn’t the time to stop putting money away for the future,” Tsouvalas said.
During times of high inflation, Tsouvalas suggested savers look for easy investment options that protect their money.
“[Examples are] term deposits, savings accounts, shares and managed or indexed funds; all of which can provide a better return on investment and help you save for big ticket items, such as a house deposit,” Tsouvalas said.
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Savvy said findings also showed a division between genders on the vehicles used to save and invest. Stocks and shares were used more by males (23%), compared to females (14%), while 26% of men said they contributed to superannuation as part of their overall savings strategy, compared to women at 21%.
