Impacts of COVID-19 on households: APA
The new results of the Australian Bureau of Statistics in household impacts of COVID-19 show how Australians expected their household income to change over the next 12 months, and how they plan to save and / or spend these funds
In June 2021, one in four Australians expected their household income to increase over the next 12 months (26%), while one in ten (11%) expected to decrease, according to the ABS figures. The most common expectation for a change in household income over the next 12 months was a 1-5% increase.
The survey also asked about household savings. Respondents indicated that their plans to use current or projected savings over the next 12 months involve:
- Travel (32%)
- Home renovation (16%)
- Mortgage repayments (15%
- Build or buy a new house (11%)
In addition, over the next 12 months:
- 54% of Australians expect their household to be able to save money
- 26% of Australians don’t know if their household will be able to save money, and
- 20% of Australians expect their household to be unable to save money.
More than half of those surveyed expecting to save money is an optimistic result, but one in five (20%) who think otherwise can be alarming. These survey results come from research conducted between June 11 and 20, 2021, so we might see that latter figure increase.
As Sydney and Melbourne face another week of lockdown restrictions with other capitals and states potentially following suit, we could see more Australians feeling financial stress as the latest COVID-19 outbreak spreads to across the country
With government backing like JobKeeper and JobSeeker off the table, you might be wondering what financial relief is available. Fortunately, other forms of financial support are provided by Australian banks, including mortgage deferrals for homeowners, small business loan deferrals for up to three months, merchant terminal fee refunds for three months, and waiver of notice periods and costs.
And owners are rejoicing as Australia’s largest bank, the CBA, has announced an extension of its moratorium on foreclosures, which means it won’t kick out an overdue customer until at least February 2022.
RateCity advice for people under financial pressure
Without a crystal ball, it’s hard to say how long these latest restrictions can last, and how much they can impact state economies and household budgets. In the meantime, there are a range of options to consider that can help put your finances in a better position.
- Support for difficulties. If you’re at a point where you don’t know how you’re going to pay your bills, pick up the phone now and call your suppliers. Banks, credit card issuers, telecom service providers and utilities are all equipped to handle hardship support payment plans and offer repayment breaks.
- Consider personal financial advice. Speak to a trusted accountant, financial advisor, or call the National Debt Helpline (1800 007 007) if you need a helping hand in making a plan for your financial health.
- If you have a mortgage, ask for a lower rate. Consider picking up the phone and asking your mortgage provider for a rate cut. It’s easier than you think, just follow our helpful guide.
- Negotiate your invoices. It’s not just your mortgage lender who can be lowered by a higher rate. Call your energy, gas, mobile phone and internet suppliers and ask for a more competitive offer. Take stock of the lower rates and packages available to new customers or across the market and threaten to leave if they don’t budge.
- Budget cuts. Take the time to go through your bank statements and assess your spending to see where you can cut back. It can be as simple as suspending subscriptions for a few months, like Netflix or Spotify, or requesting a financial break on your gym membership. Even cutting back on life’s little luxuries, like a second cup of coffee a day or buying take out food, can make a big difference in your savings over the year.