The uncertainty sparked by the pandemic has prompted millions of Australians to save more and improve their financial wellbeing, Commonwealth Bank says.
New research by the bank suggests more than half of its customers improved their financial health during 2020, paying down debt and increasing savings.
CBA measures financial wellbeing by seeing how well customers are managing their everyday finances such as balancing income, expenditures and borrowings. It also looks at how prepared a customer is financially in response to an emergency.
52% of CBA customers say their financial position improved between February and November, while only 24% believe the pandemic made them worse off. A further 24% say there has been no change.
CBA financial wellbeing manager, Mo Khalil, says the bank’s index shows most Australians were spared the worst of the deteriorating economic conditions caused by the virus.
“This improvement is primarily driven by people spending much less than they earned over this period,” Khalil says.
According to the index, conditions improved from 47.2 points to 50.5 points over the period — the largest increase since CBA began monitoring financial wellbeing of its customers in 2018.
Khalil says falls in income for some people over the period were mostly offset by large reductions in expenses during stay-at-home orders. Saving deposits have increased.
“This is a relatively positive trend as it suggests the government and industry interventions that have been put in place have worked as intended,” he says.