Price check: Jobs, income and rates weigh on cost weary Aussies, MLC report
Which money matters are most on your mind right now? If you answered with any of the following, you're in good company:
- Household income
- Job security
- High interest rates
- Home loan costs
These concerns have been highlighted in MLC's new Financial Freedom Report and perhaps aren't surprising given the range of ongoing costs Aussies have had to handle the past two years.
Yes, the so-called "Cost Of Living Crisis" lingers and that means many are still worried about money and are trying to adjust to a range of rising expenses, from their home loans to buying the weekly groceries.
The reasons for some of these things remain mirky to the average punter, but in brief, inflation is still higher than the Reserve Bank’s target band (2-3%) at 3.8%, and if that wasn't enough, interest rates are being held by the Reserve Bank at 4.35% because, in part, said inflation remains high.
Aussies households forced to adjust budgets
And yet, economic growth is weak, unemployment has ticked up (up to 4.1% in June, ABS) and many Aussies are still doing it tough on their expenses, including higher rates on home loans.
So as you might expect, household concerns persist. For example, Mozo’s data shows that 42% of people are very concerned about being able to afford higher costs. Almost as many have at least some concern (41%).
Additionally, almost half of those surveyed by Mozo (48%) feel their finances “are out of control.” Even those who didn’t feel a loss of control have had to make changes however. Mozo found that 35% of Aussies have had to adjust their finances to meet the challenges of high costs.
Higher debt, less savings
MLC's study supports the view that many Aussies are still doing it tough, while other countries such as the US and UK have already curbed high inflation.
Australia's Reserve Bank might not be in lock-step with the US Fed on this (we are said to be a couple of months behind in the interest rate cutting cycle), but at the same time it's under the microscope for its handling of the current inflationary levels by the International Monetary Fund.
Without getting to deep into the weeds, the IMF recently noted that the government's May budget added more money into the Australian economy than it removed, which means it was 'expansionary'. Expansionary budgets typically include tax cuts, rebates and increased government spending on infrastructure projects, most of which leads to boosting economic demand and growth.
Supply and demand
Very generally, more demand keeps prices high. And if nothing much changes for most Aussies in this type of economy, it's living costs that continue to be a very real challenge.
Most in the MLC findings indicate a range of hurdles to overcoming such high living costs, including their current income (34%), interest rates (25%), not owning a home (17%) and a lack of job security (13%).
The study also showed that a lot of people recognise their own use of money – including being in debt (21%), not having savings (20%), and current spending habits (16%) – is holding them back from achieving their dreams.
Of course, having extra debt and a smaller amount saved isn't easily solved in the current scenario.
Gen X and Gen Y feeling high costs most
The pressures have been felt across all generations too, says MLC.
Generation X is feeling it most acutely (74%), followed by Gen Y (60%), Gen Z (58%) and Baby Boomers (57%), as per the survey results.
MLC head of technical services, Jenneke Mills says Australians view financial wellbeing as the ability to meet their financial needs, live free from financial stress and have the financial freedom to make choices.
Many of these yardsticks were once a given, though not in 2024 when financial confidence has taken a hit.
“While they have big dreams, the report reveals many lack the confidence to achieve them,” Mills said. “The research highlights that in today’s world, developing good financial habits, underpinned by family support, is key to building confidence and achieving those dreams.”
What’s ahead? Supermarket prices in focus
Every week, research firm Roy Morgan checks consumer sentiment and its mid-October report found that the view of personal finances among Aussies has dropped, with only one-third of respondents expecting their family to be ‘better off’ financially this time next year while 31% expect to be ‘worse off’.
As noted, ongoing high-than-normal-expenses are at the centre of this feeling, and have also been the subject of recent scrutiny by the Australian Competition and Consumer Commission (ACCC) as it targets inflated supermarket prices .
This is welcome news but admittedly some faith has been lost among Aussie punters. Westpac reports that household financial pressures right now are still “intense”, led by a decline in purchasing power over the last two years. It also says that small improvements around family finances have been more than offset by a loss of confidence in the economy.
Silver linings - home loan rate relief?
Presumably if high consumer prices could be eased and higher interest rates on financial products such as home loans and personal loans could be cut, it would go a long way toward improving the way many Aussies feel about their current budgets.
The Reserve Bank next meets on November 4 when it will make a decision on the current interest rate, which would at least set in motion the prospect of rate cuts on home loans - and maybe a little bit more control over this tiring Cost Of Living saga.
If you're wanting to save more money amid all these high costs, a better savings interest rate can help. Here at Mozo we highlight some leading Savings Accounts, which you can start comparing below.
Promoted
-
PremiumSaver
- Standard rate
-
1.45
%
p.a.
(for $0 and over)
- Maximum rate
-
5.35
%
p.a.
(for $0 to $250,001)
Reward yourself with a higher rate for your good savings habits. Rabobanks’s PremiumSaver is simple - receive the maximum rate when you grow your balance by at least $200 each month (T&Cs apply). Plus, your savings help our Aussie farmers produce the food we love to enjoy.
- Standard rate
-
Balances from $0: 1.45% p.a.
- Maximum rate
-
Balances from $0: 5.35% p.a.
Balances from $250,001: 3.70% p.a.
Balances from $1,000,000.01: 3.70% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
Maximum rates apply when your closing balance on the last day of the month is at least $200 more than it was at the beginning of the first day of the month (excluding interest earned).
- Access
-
Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account. Must hold and maintain a HISA.
Read our Mozo Review to learn more about this PremiumSaver
Go to site -
Savings Accelerator
- Standard rate
-
2.85
%
p.a.
(for $0 to $50,000)
- Maximum rate
-
5.40
%
p.a.
(for $150,000 to $500,000)
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Standard rate
-
Balances from $0: 2.85% p.a.
Balances from $50,000: 3.75% p.a.
Balances from $150,000: 4.70% p.a.
Balances from $5,000,000: 0.00% p.a.
- Maximum rate
-
Balances from $0: 3.55% p.a.
Balances from $50,000: 4.45% p.a.
Balances from $150,000: 5.40% p.a.
Balances from $500,000: 4.70% p.a.
Balances from $5,000,000: 0.00% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
New ING personal savings customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000. Reverts to variable ongoing rate.
- Access
-
Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about this Savings Accelerator
Go to site
-
Savings Account
- Standard rate
-
5.00
%
p.a.
(for $0 to $1,000,000)
- Maximum rate
-
5.50
%
p.a.
(for $0 to $250,000)
Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
- Standard rate
-
Balances from $0: 5.00% p.a.
Balances from $1,000,000.01: 2.75% p.a.
- Maximum rate
-
Balances from $0: 5.50% p.a.
Balances from $250,000.01: 5.00% p.a.
Balances from $1,000,000.01: 2.75% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
Bonus variable rate is available for the first 4 months.
- Access
-
BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must have a Macquarie Transaction Account to link with.
Read our Mozo Review to learn more about this Savings Account
Go to site -
Savings Maximiser
- Standard rate
-
0.55
%
p.a.
(for $0 and over)
- Maximum rate
-
5.50
%
p.a.
(for $0 to $100,000)
Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Standard rate
-
Balances from $0: 0.55% p.a.
- Maximum rate
-
Balances from $0: 5.50% p.a.
Balances from $100,000: 0.55% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
For customers who deposit $1000 from an external source into a personal ING account (excluding Orange One and Living Super), make 5 eligible transactions and grow their nominated Savings Maximiser account each month so there is more in the account at the end of the month than there was at the start of each month (excluding interest). The total bonus interest rate is available on balances up to $100,000 on one Savings Maximiser the next month after meeting eligibility.
- Access
-
Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must be linked to an Orange Everyday transaction account to receive the bonus rate. Where multiple Savings Maximiser Accounts are held, the bonus rate is only applied to one nominated account.
Read our Mozo Review to learn more about this Savings Maximiser
Go to site -
Savings Accelerator
- Standard rate
-
2.85
%
p.a.
(for $0 to $50,000)
- Maximum rate
-
5.40
%
p.a.
(for $150,000 to $500,000)
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Standard rate
-
Balances from $0: 2.85% p.a.
Balances from $50,000: 3.75% p.a.
Balances from $150,000: 4.70% p.a.
Balances from $5,000,000: 0.00% p.a.
- Maximum rate
-
Balances from $0: 3.55% p.a.
Balances from $50,000: 4.45% p.a.
Balances from $150,000: 5.40% p.a.
Balances from $500,000: 4.70% p.a.
Balances from $5,000,000: 0.00% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
New ING personal savings customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000. Reverts to variable ongoing rate.
- Access
-
Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about this Savings Accelerator
Go to site -
PremiumSaver
- Standard rate
-
1.45
%
p.a.
(for $0 and over)
- Maximum rate
-
5.35
%
p.a.
(for $0 to $250,001)
Reward yourself with a higher rate for your good savings habits. Rabobanks’s PremiumSaver is simple - receive the maximum rate when you grow your balance by at least $200 each month (T&Cs apply). Plus, your savings help our Aussie farmers produce the food we love to enjoy.
- Standard rate
-
Balances from $0: 1.45% p.a.
- Maximum rate
-
Balances from $0: 5.35% p.a.
Balances from $250,001: 3.70% p.a.
Balances from $1,000,000.01: 3.70% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
Maximum rates apply when your closing balance on the last day of the month is at least $200 more than it was at the beginning of the first day of the month (excluding interest earned).
- Access
-
Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account. Must hold and maintain a HISA.
Read our Mozo Review to learn more about this PremiumSaver
Go to site -
Life - 18-29 years old
- Standard rate
-
1.85
%
p.a.
(for $0 and over)
- Maximum rate
-
5.20
%
p.a.
(for $0 to $30,000)
Are you 18 - 29 years of age? Earn up to a generous variable interest rate on your savings when you spend and save with Westpac. For individuals aged 18 to 29 on Westpac Life account balances up to $30,000.
- Standard rate
-
Balances from $0: 1.85% p.a.
- Maximum rate
-
Balances from $0: 5.20% p.a.
Balances from $30,000: 5.00% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
Make 5 eligible card purchases per month with a Westpac Choice account and min 1 deposit and higher balance than at the beginning of the month in Life savings account.
- Access
-
Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must hold a Westpac Choice transaction account. If 5 eligible card purchases are made each month, but savings account balance has not increased, a 2.00% interest rate still applies.
Read our Mozo Review to learn more about this Life - 18-29 years old
Go to site -
Bonus Saver
- Standard rate
-
1.00
%
p.a.
(for $0 and over)
- Maximum rate
-
5.00
%
p.a.
(for $0 and over)
Bonus interest for the first four months from the account opened date. No minimum balance required. No monthly or ongoing fees or withdrawal penalties. Manage your money easily via phone or online banking or via the BCU Bank app.
- Standard rate
-
Balances from $0: 1.00% p.a.
- Maximum rate
-
Balances from $0: 5.00% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
Bonus rate for the first 4 months from account opening.
- Access
-
BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about this Bonus Saver
Go to site -
Bonus Saver Account
- Standard rate
-
0.05
%
p.a.
(for $0 and over)
- Maximum rate
-
5.00
%
p.a.
(for $0 to $250,000)
Open a Bonus Saver Account in under 5 minutes. There are no fees to pay or penalties for withdrawing money. Get a seamless personalised insights and online statements via the My State Bank app.
- Standard rate
-
Balances from $0: 0.05% p.a.
- Maximum rate
-
Balances from $0: 5.00% p.a.
Balances from $250,000: 0.05% p.a.
- Account fee per month
-
$0.00
- Maximum rate conditions
-
Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Glide transaction account.
- Access
-
Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about this Bonus Saver Account
Go to site -
MoneyMAX Account
- Standard rate
-
4.70
%
p.a.
(for $1 and over)
- Maximum rate
-
4.70
%
p.a.
(for $1 and over)
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
- Standard rate
-
Balances from $1: 4.70% p.a.
- Maximum rate
-
- Account fee per month
-
$0.00
- Maximum rate conditions
-
n/a
- Access
-
BPay, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Branch access for deposits only.
Read our Mozo Review to learn more about this MoneyMAX Account
Go to site
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