From questionable hair choices to finding rotten food in your locker, high school memories stay with us. But what about the bits you’ve left behind, like economic lessons? According to a Household, Income and Labour Dynamics in Australia (HILDA) survey in 2019, fewer than half of Aussies could correctly answer five basic financial literacy questions. So, to get you back on track, here’s a quick crash course on the top five most important things you should know about your finances.
With the second Covid-19 wave underway, Aussies have pretty much resigned themselves to a travel-free 2020. Instead, Toluna’s ongoing Covid-19 Barometer shows that people across the country are focusing on spending locally and supporting small businesses in their area.
Australians have collectively withdrawn more than $31 billion in superannuation since the government introduced the early access super scheme, which aimed to help people manage financial hardship caused by Covid-19.But a new report has shown many may not be spending the cash injections – up to $10,000 accessible last financial year, with a repeat withdrawal available until December 31 – as intended, and others may not have needed the money to get by.No criteria or proof of hardship is required to access early super release through this scheme. The research from financial data and analytic company Illion shows 38% of people who accessed the money didn’t do so in response to a drop in income. A further 21% actually got a boost to their pay packet in addition to dipping into their super.Across both rounds of super withdrawal, a large portion have used the funds to increase spending, not simply maintain it. In the second wave, the report found 64% of this additional spend was on discretionary items like clothing, furniture, restaurant visits and alcohol.Essential spending is still in the equation, with Illion reporting this increasing from 22% to 24% across the two rounds of early super release.Overall, Illion has found women are more responsible spenders in this scenario, with a slightly higher proportion using it to pay off debt and cover essentials compared to men. Similarly, more men (10%) are spending this money on gambling compared to women (6%).
No matter the size of your savings bundle, you want to stash it in a savings account or term deposit where it can earn interest and grow. Right now, average rates for both types of deposit accounts are looking pretty grim. Mozo’s data shows the average ongoing savings interest rate is 0.82% p.a., with term deposits only just edging ahead at 0.95% p.a. for a one-year term.However, there are outliers with much more appealing numbers, especially in the savings account camp. So, you might want to start searching for a stellar rate. For example, young savers (18-29 year olds) can nab a market-leading 3.00% interest rate with the new Westpac Life account, while savers at any age will earn 1.65% p.a. on top of their savings with the ING Savings Maximiser (if criteria is met in both cases).But there is a catch: bonus interest that can be earned on these accounts caps out at $30,000 and $100,000 respectively. If you’ve got a large savings balance – perhaps you’ve recently earned money on the sale of a property or have received a redundancy payment – you’ll need to find a savings account that provides top features across your full balance. Check out a few potential contenders below which could cater to your higher balance needs. They’re all Mozo Expert Choice Award winners for 2020, so you know they’ve got our seal of approval.*
If you’re an avid saver, then we don’t have to tell you that a year ago neobanks were your best bet for a decent return on your savings. However, recent Mozo analysis has shown that three neobanks have been forced to follow in the footsteps of the big four banks and slash their savings accounts rates. Over the last month, Mozo found that Up made the biggest reduction by shaving 25 basis points off its Saver Account (1.65%), meanwhile Xinja and 86 400 both cut 15 basis points off their savings products, bringing the rates down to 1.65% and 1.70%, respectively. “While the neobanks had managed to offer a glimmer of hope for the nation’s savers, these out of cycle cuts are a worrying sign,” said Mozo Director, Kirsty Lamont. “As they seek to attract new customers, we’ve come to expect the neobanks will buck the downward trend of the banks but with their savings rates also heading south they appear to be rejoining the pack.” According to the Mozo database, Australian Unity and MyState Bank currently offer the leading at-call savings rate of 1.75%, while the big banks severely lag behind with an average on-going savings rate of 0.54%, 121 basis points difference. Though there was some good news for younger Aussies looking to boost their savings balance, as Westpac launched its new Westpac Life account, boasting an impressive 3.00% for balances up to $30,000.
Nearly 90% of Australians have items that they either don’t want or don’t use in their homes, according to Gumtree’s 2019 Second Hand Economy report. The report shows that the average Aussie household is sitting on over $5,000 worth of unwanted goods that could be sold on.
Given it’s one of the big banks, you might be thinking of stashing your hard-earned cash with ANZ. It has a few different savings accounts right now, whether you’re looking to build your nest egg or you’re just after a temporary place to park your money. But also keep in mind that ANZ is currently behind some competitors when it comes to interest rates, according to Mozo data.So how does ANZ compare to the rest of the market? Let’s take a closer look.
The Australian Prudential Regulation Authority (APRA) has estimated that a whopping $30 billion has been taken from superannuation accounts as a result of the Covid-19 pandemic. Whether Aussies are choosing to do this willing or because of little choice, it’s not painting a pretty picture for retirement. New research from Colonial First State has revealed that 23% of Aussies between the age of 30-65 believe they will have to delay retirement and work longer due to the pandemic. Almost half (45%) of respondents also confessed to either feeling scared or not financially confident about retiring. “The Coronavirus pandemic has significantly changed the world, not only socially but financially too. These are extremely challenging times for many people,” said Colonial First State’s general manager, Kelly Power.
As headline rates dropped in July, Westpac made a surprise move. The big four bank introduced a new savings account: Westpac Life, which comes with an enticing 3.00% p.a. interest rate.
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