Australians plan to splurge on travel in the next year despite restrictions

A third of Australians are planning to dedicate a portion of their savings to travel over the next 12 months, according to July Australian Bureau of Statistics (ABS) figures.

The survey, conducted in June, found 54% of households expect to be able to save money over the coming year, while 26% are unsure of their savings status and 20% do not expect to make headway on savings goals.

Alongside travel plans, the most recent ABS Household Impacts of COVID-19 Survey found housing was another major spending area. 

Home renovations (16%) mortgage repayments (15%) and buying or building a new home (11%) were also at the top of the list of cash splashing plans.

In terms of income, the same report found 63% of respondents expect their income to remain the same in the year to come, while 11% anticipate a decrease. These numbers are relatively consistent with results from the previous quarter, and could help explain the recent reduction in retail spending.

A separate ABS dataset shows retail turnover fell 1.8% in June, with COVID-19 lockdowns unsurprisingly being tipped as the main driver of the drop-off in spending. 

The figure still stands as an increase on the same period for 2020, but is a significant reduction on the 2021 March quarter results which only saw a 0.1% drop.

Where to stash your savings in 2021

Each month Mozo takes a broad look at the savings landscape. Unfortunately, things haven’t been looking too shiny. 

As we saw in our August savings snapshot, the last year has been coloured by cuts to savings rates. Interestingly though, our latest term deposit snapshot noted the number of cuts to these less-accessible longer-term accounts has slowly begun dropping over the last few months, with rate increases on the rise.  

Despite overarching trends, there are options in both camps that will be more suitable for different kinds of savers, such as younger customers taking advantage of higher rates or those looking to lock away savings for longer periods and be rewarded. 

So, be sure to read up on the pros and cons of savings accounts versus term deposits and check out competitive rates across the board before deciding where to stash your cash.