Cash savings rise during pandemic, yet 21% of households have less than $1,000 saved


Despite the financial impacts of the COVID-19 pandemic, new research has revealed that the level of ‘financial comfort’ felt by many households, including household savings balances, has actually improved over the past year and a half.

That was the headline takeaway from ME’s latest bi-annual Household Financial Comfort Report, which provides a snapshot of Australian financial positions based on a survey of 1,500 households conducted in June.

While the latest report doesn’t capture the effects of the extended lockdowns that have occurred in Sydney and other parts of the country since late June, it does show that household comfort levels rose between December 2020 and June 2021.

ME’s Household Financial Comfort Index for June 2021 hit 6.04 (out of a possible 10), which was 3% higher than the December 2020 score and 8% higher than before COVID-19.

“Despite the phasing out of most government COVID-19 financial assistance during the first half of the year, several factors have bolstered households’ sense of wealth and comfort with their finances,” said ME’s consulting economist, Jeff Oughton.

“These include rising investments such as the property market, slightly higher average incomes in a rebounding job market and more conservative spending and savings behaviour. For most households, their comfort has even bounced significantly higher than pre-pandemic levels.

“Of course, there are still sections of the population, for example single parents, insecure workers including casual and gig economy workers, the unemployed, and self-employed Australians, who aren’t feeling as financially comfortable. These groups are highly susceptible to changes in Government support and ongoing turbulence during Australia’s economic recovery.”

Spending caution leads to savings surge

According to the report, levels of household ‘comfort’ with cash savings reached the highest point they’ve ever been in June, with many Australians continuing to take a cautious approach to their finances.

58% of households reported that they were currently spending less than they earned, which is noticeably up on the 48% of households who reported doing the same before the pandemic (in December 2019).

As a result, households reported that they were saving an average of $960 each month, which is $110/month higher than ME’s historical average.

In terms of savings account balances, almost a quarter of households (22%) have cash savings of $100,000 or more. And while that figure hasn’t budged in six months, it is five percentage points higher than December 2019 levels, which represents the greatest increase during the COVID period.

Many remain ‘highly vulnerable’

However, the picture continues to be less rosy for many households.

While down on pre-pandemic levels, ME’s research shows that 34% of households are spending all of their income and are not able to save anything, and a further 8% are spending more than they earn.

And though households with significant savings balances have managed to increase their cash savings during the pandemic, a considerable 21% of households have less than $1,000 saved. Worryingly, 9% reported to have less than $100 in savings.

A quarter of households also reported that if they lost their source of income they wouldn’t be able to maintain their current lifestyle for more than a month - a figure put into stark reality given that Sydney’s lockdown is currently in its ninth week and Melbourne's latest lockdown has just hit the 3-week mark.

“Despite more households saving and an overall greater comfort with cash savings, there’s still a significant proportion of Australians that remain highly vulnerable to a loss of income,” said Oughton.

“With pandemic lockdowns continuing to occur across Australia, households with low cash savings are at significant risk, especially in instances of extended strict lockdowns like we’re currently seeing in New South Wales, Queensland and Victoria.”

RELATED: Your essential guide to building an emergency savings fund

If you’ve been impacted financially by the pandemic and want to learn more about the support measures in place for individuals and businesses, then feel free to check out our dedicated coronavirus and your finances guide.

Savings account comparison - last updated 13 June 2024

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Savings Account

    5.35% p.a. (for $0 to $250,000)

    4.75% p.a.(for $0 to $1,000,000)

    Yes up to $250,000

    Bonus variable rate is available for the first four months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.

  • High Interest Save Account

    5.10% p.a. (for $0 to $250,000)

    0.10% p.a.(for $0 and over)

    Yes up to $250,000

    Deposit at least $200 to either Spend, Bills or Save account from an external source each month.

    No monthly fees on any of your save accounts. Split your money with up to 10 Save accounts. Set savings targets and track the progress of all your Save accounts. Deposits guaranteed up to $250K per customer.

  • PremiumSaver

    5.45% p.a. (for $0 to $250,001)

    1.50% p.a.(for $0 and over)

    Yes up to $250,000

    Increase balance by $200 by the end of each month

    Reward yourself with a higher rate for your good savings habits. Rabobanks’s PremiumSaver is simple - receive the maximum rate when you grow your balance by at least $200 each month (T&Cs apply). Plus, your savings help our Aussie farmers produce the food we love to enjoy.

  • Mozo Expert Choice Badge
    Savings Maximiser

    5.50% p.a. (for $0 to $100,000)

    0.55% p.a.(for $0 and over)

    Yes up to $250,000

    For customers who have an Orange Everyday account, deposit $1000 into a personal ING account, make 5 eligible transactions and grow their nominated Savings Maximiser account each month.

    Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^

  • Reward Saver Account

    5.25% p.a. (for $0 to $1,000,000)

    0% p.a.(for $0 and over)

    Yes up to $250,000

    Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.

    Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.

  • Bonus Saver Account

    5.00% p.a. (for $0 to $250,000)

    0.05% p.a.(for $0 and over)

    Yes up to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Glide transaction account.

    Start saving and earn interest with just a $20 deposit and make 5 eligible transactions each month. No fees or penalties for withdrawing money.


^See information about the Mozo Experts Choice Savings Account Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.