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Australians 'putting less away for rainy day'

Australians 'putting less away for rainy day'

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Date Published : Friday, June 20, 2008

The number of Australians that are putting some of their household income away in savings accounts has fallen as economic pressure forces some families to break open their nestegg, new research shows.

The report by the Melbourne Institute found that overall saving was down to 43.5 per cent in June, compared to 45.4 per cent in the three months to March and 45.9 per cent 12 months ago, news.com.au reports.

Meanwhile, the number of people drawing on their savings had risen from 9.4 per cent in June 2007 to 11.9 per cent now.

Among those who are saving, 82.9 per cent said they are using a savings account from a major bank.

Furthermore, the report found, the most common reasons for saving were taking a holiday and having a financial cushion to guard against a "rainy day", such as illness or unemployment.

Another 20.3 per cent of those questioned for the study said high interest rates would make them consider using new savings to pay off their mortgage. This was up from 12.7 per cent 12 months ago and 16.7 per cent in March.

For those looking to free up more of their income for a savings account, the news site recently featured a number of tips for increasing the money available for a nestegg.

They include planning out a personal budget in advance, using different types of bank accounts for different financial needs and comparing savings accounts or loan rates to get the best available deal.

A recent survey by Citibank and Galaxy Research found 81 per cent of Australians have "no idea" of their savings account's interest rate.

Compare savings accounts.
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