More than three-quarters (77%) of Australians have adopted a more cautious spending mindset due to the economic impact of COVID-19, according to ME’s latest COVID-19 Financial Sentiment and Spending Survey.
Of the 1,000 Australians surveyed, 68% said they ‘don’t feel they’re in financial trouble, but have chosen to cut back on spending just in case’ – an increase of 5 percentage points since April 2020. Among Australians whose income was unaffected by the pandemic, over half (54%) said they’re now ‘saving more’.
ME general manager for personal banking, Claudio Mazzarella said it’s likely many Australians are building their ‘rainy day’ cash buffers.
“Christmas 2020 will be a tough one for retailers based on these numbers,” he said.
“While saving is important, it’s also vital consumers shop around for the most competitive savings accounts and consider the best ways to spend to help get the economy firing again. Many retailers are offering very good deals so now might be the ideal time to invest in discounted high-quality items you’ll need in future, like a new mattress or washing machine.”
According to ME’s survey, an overwhelming 91% of Australians said ‘it’s important to support businesses that have had their revenue and jobs negatively affected by the pandemic’.
When Australians were asked if they ‘anticipate spending money to celebrate a return to normal life once all COVID-19 pandemic restrictions are lifted’, the majority of Australians (60%) said ‘no’ − once again reflective of a conservative spending mindset. The top reasons were don’t feel the need to celebrate restrictions lifting or spend money to do so (59%) and would prefer to save money to improve financial security (48%).
Of those that do intend to spend once all restrictions have lifted, the most popular activities Australians are looking forward to are going on a holiday (68%), going out to eat at restaurants and cafes (54%), going for drinks at pubs and bars (36%), arranging a meal with the family (36%) and shopping for items other than groceries (35%).
While most Australians won’t be spending big to celebrate the end of all restrictions, Victorians appear to be the outlier, with 62% of metropolitan Victorians planning to spend to celebrate once restrictions ease. This is compared to 47% of Sydneysiders or 39% of metropolitan Queenslanders.