ME Bank warns Aussies will struggle without government support
![Woman sitting at table with head in hand, looking at bills and worrying about government support ending.](https://cdn.mozo.com.au/images/atwood/10715/money_struggles_content.jpg)
Despite the recession and Covid-19, financial comfort for Aussie households has actually increased over the past few months. The question is, are these newfound comfort levels longlasting, or a sign of skating on thin ice?
This surprising turn of events was revealed by ME Bank in its latest Household Financial Comfort report. The research shows that government support combined with Aussies becoming more money conscious has pushed financial comfort to a record high in recent months.
ME Bank’s consulting economist, Jeff Oughton says, “Fear of Covid-19 and a very weak labour market triggered many households to increase precautionary savings, reduce spending, draw on long-term savings, such as superannuation, and delay bills or loan repayments.”
Some Aussie households have less than $1,000 in savings
According to ME’s findings, around 21% of households have less than $1,000 in savings. Three percent said they would be able to maintain their current lifestyle for six months if they were to lose income, while 7% said it would only take them three months to get into hot water.
Oughton says that while government stimulus has bought some time and helped boost financial resilience for households, a savings cliff is still looming for many Aussies, should government support taper.
“Unless the economy gains momentum, tapering government support too soon could have disastrous consequences on the financial comfort of households.”
Prior to the JobKeeper and JobSeeker announcements, 34% of households said they were worse off as a result of the pandemic. Things could just as easily go downhill again for many households, should government financial support be reduced.
“Financial comfort levels are up for now, but many households are on the cliff’s edge. They’ve lost income, their jobs and entire livelihoods, their water-thin savings buffer is dwindling, and government support is the main action stopping them from falling over,” says Oughton.
Lifeline for Gen Z and single parents
Although financial comfort for Gen Z and single parents has increased the most, the reality is that to remain financially stable, many have had to apply for government support, dip into their savings and super fund.
The number of Gen Zs who accessed their super early was three times higher than the national average. Around 27% were forced to dip into existing savings and 26% delayed or deferred bill payments.
Future Super co-founder Kirstin Hunter commented on the government’s early release of super scheme this month saying that superannuation was never intended to be used as a national relief fund.
Hunter said that a 32-year-old who withdraws $20,000 now could have $50,000 less in their super by the time they retire.
Building an emergency savings fund
While financial support is available at the moment for those who have lost work, over the long term it is still a good idea to have an emergency savings fund to fall back on.
We’ve come up with three easy steps to get you started on your’s:
- Review. Look at how much, if any money you have saved at the moment and think about how much you want to save and how much you can save realistically. Tip: Having enough money to cover three months worth of costs is a good rule of thumb to follow.
- Read. Read our essential guide to building an emergency savings fund to find out what your stash needs to cover and how you can get the ball rolling.
- Re-energise. Re-energise your savings with a high interest savings account. While some savings rates are close to zero right now, others are over 1.50% p.a. Compare savings accounts and make sure you’re receiving the most competitive rate possible.
Check out the savings accounts below for more options on where to keep your emergency savings fund.
Compare savings accounts
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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 4 months.
Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2024 Mozo Experts Choice Award winner.
CompareCompareSavings Account
Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2024 Mozo Experts Choice Award winner.
- Maximum rate
- 5.35% p.a. (for $0 to $250,000)
- standard interest rate
- 4.75% p.a.(for $0 to $1,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus variable rate is available for the first 4 months.
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must have a Macquarie Transaction Account to link with.
Read our Mozo Review to learn more about the Macquarie Savings Account
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Mozo experts choice awards won:
- High Interest Savings - 2024
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.^
CompareCompareSavings Maximiser
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.^
- Maximum rate
- 5.50% p.a. (for $0 to $100,000)
- standard interest rate
- 0.55% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- For customers who deposit $1000 from an external source into a personal ING account (excluding Orange One and Living Super), make 5 eligible transactions and grow their nominated Savings Maximiser account each month so there is more in the account at the end of the month than there was at the start of each month (excluding interest). The total bonus interest rate is available on balances up to $100,000 on one Savings Maximiser the next month after meeting eligibility.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must be linked to an Orange Everyday transaction account to receive the bonus rate. Where multiple Savings Maximiser Accounts are held, the bonus rate is only applied to one nominated account.
Read our Mozo Review to learn more about the ING Savings Maximiser
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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.
CompareCompareReward Saver Account
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.
- Maximum rate
- 5.25% p.a. (for $0 to $1,000,000)
- standard interest rate
- 0% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- 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.
- Access
- ATM, EFTPOS, Visa Debit, Cheque book, BPay, Branch access, Phone banking, Internet banking, Bank@Post
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about the IMB Bank Reward Saver Account
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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.
CompareCompareBonus Saver 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.
- Maximum rate
- 5.00% p.a. (for $0 to $250,000)
- standard interest rate
- 0.05% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Glide transaction account.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the MyState Bank Bonus Saver Account
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Mozo experts choice awards won:
- Kick Start Savings - 2024
High Interest Savings Account
5.75% p.a. (for $0 to $250,001)
4.40% p.a.(for $0 to $250,001)
Yes up to $250,000
Bonus rate for the first 4 months from account opening
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account. No Account keeping fees. No minimum balance. Support Aussie farmers with every dollar you save.
CompareCompareHigh Interest Savings Account
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account. No Account keeping fees. No minimum balance. Support Aussie farmers with every dollar you save.
- Maximum rate
- 5.75% p.a. (for $0 to $250,001)
- standard interest rate
- 4.40% p.a.(for $0 to $250,001)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate for the first 4 months from account opening, reverting to standard variable rate. Rate shown is for Personal customers and is subject to change. Different rates apply to Business/SMSF customers.
- Access
- Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the Rabobank High Interest Savings Account
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Your selected savings accounts
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^See information about the Mozo Experts Choice Savings Account Awards
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