Australians are saving more during the pandemic, research shows

UBank chief executive Philippa Watson. Picture: Supplied
UBank chief executive Philippa Watson. Picture: Supplied

Heightened economic uncertainty sparked by ongoing virus lockdowns has prompted a savings spree among younger Australians.

A new survey from National Australia Bank's digital subsidiary UBank has shown 37 per cent of Australians believe the latest round of stay-at-home orders has had a positive impact on their savings capabilities.

Of the more than one-third who said the pandemic had positively changed their savings habits, 45 per cent were millennials, while the next biggest cohort was generation X and then baby boomers.

Ubank chief executive Philippa Watson said the research broadly showed how the pandemic was influencing spending and savings habits, especially among younger generations, which have been more adversely affected from the economic shutdown.

"We know young people have been disproportionately impacted by lockdown job losses, as they over-index in sectors such as hospitality and retail," Ms Watson said.

"The result is that saving for an emergency fund has overtaken saving for an overseas holiday as the top savings goal.

Ms Watson noted uncertainty and enforced lockdowns were resulting in a "silver lining" in savings behaviours.

The insights by UBank come as recent national accounts data from the Australian Bureau of Statistics showed the household savings ratio increased to 19.8 per cent from 6 per cent in the March quarter.

The ABS noted the rise in the savings ratio was being fuelled by a fall in consumption expenditure over the quarter.

UBank, in contrast to its rise in positive savings behaviour, found one-in-five people believed COVID-19 was having a negative effect on their ability to put money aside, primarily from increased spending online.

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Around one-third of the respondents said the pandemic had no impact on their spending patterns.

Ms Watson said the research also recorded increasing spending through social media during the stay-at-home period.

Australians on average were spending around $500 per month on or $6000 a year on discretionary items such as clothing, subscriptions and tech through social media platforms, UBank said.

"We know young people love social media and apps, so it's likely the shift we're seeing in spending on these channels will continue," Ms Watson said.

"More surprisingly, it's men who are spending more on average each month online in areas like clothing, dining out, entertainment and gadgets."

Physical retail trading has slumped in recent months due to lockdowns impacting the south-east of the country, with July trading data showing a national 2.7 per cent dip in sales compared to the prior month.

Ms Watson noted the bank expected to see spending patterns return to more traditional formats when lockdowns end later in the year.

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This story Australians are saving more during the pandemic, research shows first appeared on The Canberra Times.

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