Tough at the bottom in Australia

Inequality in household savings is "considerably worse" than the disparity in incomes according to new research, which found the wealthiest 20 per cent of Australian households hold more than 200 times the average savings of the poorest 20 per cent. The richest 20 per cent of households own 68 per cent of all superannuation savings, 62 per cent of all cash deposits, and more than 95 per cent of the value of trusts.

The savings of the richest fifth account for three-quarters of all household savings. Millionaire households, while only accounting for 8 per cent of all households, hold more than half of all savings.

The wealthiest fifth of Australians have on average $1.3 million in savings, compared to the poorest fifth, which have saved on average less than $6,000. "Savings" is defined as the difference between disposable income and what households spend on goods and services. They comprise accounts held with financial institutions, the net value of a business, shares, debentures, bonds, trusts, superannuation funds, and loans to other people. Real estate is excluded from the definition of savings.

This level of disparity comes despite the top 20 per cent of savers having just under four times the average household disposable income that the bottom 20 per cent of savers have.

Superannuation and cash saved in financial institutions are the main form of savings for Australians, with the median saver sitting on household savings of around $100,000.

In 1990, average household debt represented less than six months of income for “low economic resource” households, but had now swollen to one-and-a-half years of income.

The number of millionaire households in Australia (with savings or financial assets valued at $1 million or more, excluding the family home) has increased from under 300,000 since 2005 to almost 700,000 in 2015.

“Debt, low or no savings, and low incomes presents many families with an unenviable challenge to maintain an acceptable quality of life for themselves and their children on a day-to-day basis." Professor Alan Duncan from Curtin University's business school says, [as if we didn’t know]