Evaluating Australian Savings: A Breakdown by Age
Discussing personal savings has often been regarded as a sensitive topic in Australia. However, recent trends in financial transparency are shedding light on what constitutes a reasonable amount of savings, allowing individuals to gauge their financial health more effectively.
Westpac’s Analysis of Average Savings
Westpac, one of Australia’s major banks, has provided insights into the average savings balances of its customers across different age groups. This data, based on active savings accounts, reveals a substantial disparity in savings as Australians hit various life milestones.
For instance, customers aged 30 to 34 reported an average savings balance of $21,394, while the median amount sat at $1,104. Understanding the distinction between average and median is crucial; the average (or mean) can be skewed by extreme values, whereas the median represents a better reflection of typical savings behaviour across the board.
Average Savings by Age Group
Here’s how savings stacks up for Australians based on different age brackets:
- 17 and under: Average – $4,769, Median – $1,135
- 18 to 24: Average – $13,069, Median – $2,410
- 25 to 29: Average – $19,165, Median – $2,200
- 30 to 34: Average – $21,394, Median – $1,104
- 35 to 44: Average – $29,769, Median – $811
- 45 to 54: Average – $52,836, Median – $1,429
- 55 to 64: Average – $87,891, Median – $5,316
- 65 to 74: Average – $101,004, Median – $15,829
- 75 and over: Average – $130,597, Median – $31,424
These figures indicate that savings generally increase with age, but they also underline the impact of life events and financial goals such as property purchases and retirement planning.
Impact of the Cost-of-Living Crisis
Despite these averages, the financial landscape for many Australians has been challenging, particularly due to the ongoing cost-of-living crisis. A recent survey by Finder revealed that nearly 40% of Australians had less than $1,000 in savings as of April. This survey, which included over 60,000 respondents, highlights the financial pressure many are currently under.
In terms of overall cash savings, the average Australian reportedly holds $33,345. A gender breakdown shows that men have an average of $42,496, while women average around $23,084. Savings by generational cohorts reveal that Baby Boomers possess an average of $48,374, Gen X $39,065, Gen Y $26,008, and Gen Z $13,218.
Financial Stress and Emergency Savings
Current financial constraints are leading to increased stress among individuals, with 77% of people expressing concerns about their financial situations. Financial advisors typically recommend maintaining an emergency fund equivalent to three months’ worth of income to mitigate unforeseen expenses, such as unexpected medical bills or car repairs.
Findex financial adviser Jess Bell suggests that having this safety net is essential for handling life’s unpredictability, allowing individuals to better cope with financial emergencies when they arise.
Conclusion
Understanding your savings in the context of your age and the financial landscape is vital. While average figures provide a useful benchmark, personal financial health varies greatly. It’s essential for Australians to strive towards building savings that can serve as a buffer against life’s uncertainties, all while maintaining awareness of the broader economic pressures in play. Financial wellness is a journey, and being informed is a crucial first step.
