What would the average Australian do with a 5% pay rise? One fifth would put the money towards their mortgage repayments.
The ING DIRECT Financial Wellbeing Index for the first quarter of 2014 shows the proportion of mortgage-free households in Australia is 26% and almost a third of households (31%) are renting.
Among households with a mortgage, 42% are paying down ahead of time (down slightly from 49% in Q4 2013) and 4% are falling behind in their mortgage repayments.
Across Australian households the median savings level is $14,702 – close to the high level established in Q3 – but 15% of Australian households have no savings.
Six per cent of households say their household income is not enough to cover immediate bills and debts, and 7% say it is almost impossible to pay all the monthly bills on time.
customer executive director of customer John Arnott
thought the results were promising.
“Although many Australians are experiencing a shortfall of cash between pay cheques, these households are likely to be including savings and debt repayments into their monthly commitments.
“With this in mind, Australians continue to take a sensible approach to household financial management.”
- Nearly half (46%) of Australians say they would need an additional $300 or more per week to feel entirely comfortable with their take-home salary.
- If they were to receive a 5% pay rise, 82% would save it in some way and 11% would spend it.
- Of those who would save it, 18% would put it towards mortgage repayments, 24% would pay down credit card debts or other bills, 36% would put it into savings, and 5% would make an extra superannuation payment.
- Of those who would spend it, 8% would take a holiday, and 4% would treat themselves/family.
The index was compiled from the online responses of 1,050 households between 7 April and 11 April 2014. The data was weighted by region and household size to reflect the Australian household population based on the 2006 census.
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