How Aussies became savers
Australia's household savings ratio fell from around 20 per cent of disposable income in the early 1970s to around zero by the early 2000s according to a new research paper from the Reserve Bank of Australia. Things turned around in the second half of the 2000s and the current savings ratio is about 10 per cent.
In the mid-2000s households with less secure income and those vulnerable to asset price shocks, higher-educated households, younger households with debt and older households with wealth all tended to increase their savings.
Factors contributing to increased saving included a reduction in future income expectations, an effort to rebuild wealth after the financial crisis, changing attitudes to debt and changing consumption patterns.
Source: Banking Day