Half of Australia can’t support themselves longer than 3 months if injured or ill

By Jack Dona · · 2 min read
Fact Checked

Key points:

  • 46% of Aussies have less than 3 months' emergency savings 
  • Women are 56% more likely to have 1 month or less in savings than men 
  • A high-interest emergency savings account, income protection or TPD insurance could help you out when you need it most. 
broken leg

New research from life insurance provider MLC reveals that almost half (46%) of Australians have just three months’ savings or less to live on if they were injured or fell ill and couldn’t work. 

When asked how long they could cover their expenses if they suffered an injury or illness that prevented them from working, 29% said their current savings would only last one month, while a further 17% said they could hold out for one to three months.

A graph displaying the proportions of Australians with different amounts of savings buffers
Source: MLC Life Insurance via Freshwater Strategy

Women are much more likely to have savings of one month or less 

MLC found a gap between men's and women’s savings buffers, which puts women at 59% more likely to have savings of one month or less than men. 

On the other end of the financial spectrum, the percentage of men who reported a savings buffer of two years or more is 19%, but only 11% for women. 

So, what can be done for the 46% of Australians whose savings buffer would last them a quarter of a year at most? 

High-interest savings, income protection insurance & TPD insurance 

Building an emergency savings fund can be difficult during a cost of living crisis. 

So, when you do have spare cash to put away, make sure you find a high-interest savings account to generate some extra income. 

It might also be worth looking into whether you need income protection insurance, or not. 

Basically, it’s a way to cover a portion of your income if you’re injured or fall ill and can’t work. How much of your income is covered can differ from policy to policy, but it’s generally around 85% of your pre-tax income.

Remember, it’s very important to read the product disclosure statement (PDS) of the policies you compare to make sure you understand which circumstances are covered and which aren’t. 

You might also want to compare life insurance policies featuring a total and permanent disability (TPD) benefit, which can cover your rehabilitation and living costs if you’re unable to work due to a total and permanent disability. 

As part of the Mozo Experts Choice Awards^, the experts found Australia's best life insurance, highlighting a couple of exceptional value products. That’s a good place to start your search for an income protection or life insurance policy. Or, check out some of the featured providers below.