How much does the average Australian save?

Choppy financial waters have meant that the average saver has burnt through their cash quickly this year. In fact, Mozo’s 2024 savings report found that 1 in 6 (16%) Aussies are putting their savings goals on hold. 

So what are savings balances looking like and what can we do to improve our situations?

Recent reports and studies shed light on the savings habits of Australians. For example, the Australian Bureau of Statistics (ABS) March release of its Australian National Accounts stats gives us an idea of how much cash Aussies are putting away in comparison to previous years.

The latest household savings-to-income ratio was recorded at 0.9% in March, a far cry from its 24% high in June 2020 and the lowest it has been since 2007. 

Mozo data on Aussie savings 

Our recent SOS Savings Report for 2024 found some interesting stats amongst savers. For instance, NSW residents had a higher average amount of savings than any other state or territory, largely driven by Sydneysiders who had saved on average a whopping $31,167. 

But location is only one side of the story. Savers of different age ranges have differing levels of success when it comes to reaching savings goals. 

As we can see, survey data shows that Gen Z and Millennials struggle most in meeting their savings goals, while Gen X and Boomers struggle the least. Yet, despite Gen Z's overall difficulty with hitting goals, they actually lead in achieving them, followed by Gen X, then Millennials.  

Beyond demographics, there are a couple of macro factors that affect how much people save. Some of these include: 

• Economic conditions: These include inflation rates, interest rates, and economic growth which significantly impact how much people can save. For instance, higher interest rates often encourage saving, whereas economic downturns might necessitate dipping into savings.
• Income levels: As highlighted by the NAB findings, your income level plays a role in how much savings you’re likely to have. Higher-income individuals can usually save more from more disposable income and a wider option of non-essential purchases they can cut. Meanwhile, lower incomes tend to result in lower levels of saving money.
• Cost of living: The cost of living in Australia, particularly in major cities like Sydney and Melbourne, can greatly affect the ability to save. Rising housing costs, utility bills, and general expenses can take a substantial portion out of one's income.
• Lifestyle choices: Personal priorities and lifestyle choices also dictate savings habits. For example, a trend towards more sustainable living might see individuals saving more by reducing consumption.

Getting the most out of your savings doesn’t have to be entirely dependent on the cohort you belong to. There are some strategies to consider:

Savings patterns and goals

As noted in our savings report, younger Australians (particularly those in their 20s and early 30s) might have different savings patterns compared to older age groups. For instance, younger savers are usually focused on education or initial career stages and older individuals tend to save for retirement. So, make sure you have a clear idea what your financial goals are and that they meet your stage of life. 

Savings account type

Bonus rate savings accounts may see lower rates of withdrawal. This is because they generally require that you grow your account balance from the previous month. This means that if you withdraw, you could revert to a lower base rate which could motivate more frugal habits.

Finding a good savings interest rate, generally

Savings rates are varied, with many of the leading savings account providers competing to win your favour. It’s worth paying attention to this because even if you have a relatively small stash of cash to put away, an annual interest rate that’s above the average will help you grow your money. Consider that among some of the leading rates in the Mozo database right now are Macquarie Savings Account at 5.35% p.a (4 month intro rate), Rabobank High Interest Saving Account at 5.75% p.a (4 month intro rate) and ING Savings Maximiser at 5.50% p.a (bonus rate).

Personal finance tools

Effective personal finance management is key to improving savings. Budgeting, round-ups (a handy savings app feature), and spending trackers can all be helpful tools that improve your financial situation.

Our savings report found that 69% of Australians have never switched their account and this means a significant portion of the population could be missing out on some great rates that providers  have on offer. 

Generally, the 1 in 6 Aussie savers that never switched said so because “it was too much effort” and only earned an average rate of 3.12% p.a—currently, our database has an average ongoing rate of 3.50%. Meanwhile, Aussies who switched to get a higher interest rate had an average savings account rate of 4.56% p.a, close to our database average bonus rate at 5.01%.

Getting your money to work for you is an important part of the savings journey. If you’re reliably getting a good savings interest rate, you’re growing your cash reserves and building a financial buffer. 

So how do you find the best savings account providers to switch to? This is where we come in. Mozo’s database has 274 savings accounts from 70 providers that you can compare on our main hub pages. Alternatively, you can also check out some providers in the tables below…