Coronavirus has forced a third of Australians to dip into their savings, with many using money they intended for first home deposits.
Many others have been forced to eat into their savings for retirement.
That is according to research for Tasmanian-based MyState Bank, which warns many people will be hit harder as federal financial support winds back.
MyState Bank general manager, customer experience, Heather McGovern said many people were still struggling to manage their finances despite financial hardship assistance available from the government and banks.
“What started out as ahealth crisis has been felt in the hip pockets of many Australians across the country,” Ms McGovern said.
“While lockdown measures have helped some Australians into a better financial position, for others, it has left gaping holes in their household income.”
The research was based on a survey by Pureprofile of 1008 Australians between June 1 and June 4.
- Half of respondents said they would not be able to afford a $200 increase in monthly household expenses;
- 18 per cent said the pandemic’s economic effects had cut their household income by more than a quarter;
- 33 per cent had dipped into their savings to get by since the crisis started;
- of those, 23 per cent said the savings were originally for a first home deposit;
- a further one fifth said the savings were for their retirements;
- 38 per cent of respondents did not have an emergency fund before the outbreak; and
- 41 per cent expected their finances would continue to be affected in the next six to 12 months.,
One in 10 who had drawn on their life savings estimated they had spent more than half of them.
“With financial support from the government winding back in September, many Australians are likely to feel the pinch even more,” Ms McGovern said.
“As a bank we recognise the need to help our customers stay financially healthy during this time.
“The economic implications of COVID-19 have caused many households across the country to redirect their savings to the basic necessities, shelving their big financial goals and decisions, at least, for the time being.”
Paying for essentials such as groceries (39 per cent) and household bills (39 per cent) were the main reasons why Australians were accessing their savings.
MyState Bank said some people were faring better with financial security.
“Working from home arrangements and fewer opportunities to spend discretionary income are arguably enabling Australians to bolster their savings at a faster rate than ever before,” it said.