According to Dun & Bradstreet’s Consumer Credit Expectations Survey, almost 40 per cent of working Australians would struggle to live on their savings for 30 days if they lost their current job.
In addition to this D&B also highlighted that 38 per cent will be forced to use their credit card to cover expenses in the months ahead, which indicates that despite signs of recovery in the economy, consumers are still wary of the future.
Overall the survey looks at Australians expectations for savings, credit usage, spending and debt performance over the September 2009 quarter.
According to the results, middle income households ($30,000–$69,999) and the two younger age groups (18-34 and 35-49) in particular are demonstrating the highest signs of financial stress.
This middle income bracket has a higher percentage of people who would struggle if they lost their job, with 51 per cent of respondents that would only last 30 days on savings. This is compared to 32 per cent for households earning over $70,000, 48 per cent for people aged 18-34, and 25 per cent for the over 50’s.
Christine Christian, D&B CEO, commented on how the economic climate is making it difficult for certain demographics to manage their budget.
“Deteriorating employment conditions are of significant concern. We are now seeing demographics that were previously relatively stable financially facing difficulties managing their expenses as the rise in unemployment flows through to households,” she said.
“With unemployment expected to continue rising, an increasing number of Australians will be impacted in the months ahead. This could result in a further deterioration in consumer finances forcing some Australians into deeper financial difficulty before conditions improve.”
Christian also discussed how unemployment has a dramatic effect on consumer spending.
“In addition, the flow on effect of rising unemployment on the economy could also impact consumer spending, which has been buoyed in recent months by the government stimulus package,” she said.
“If retail sales drop in the coming months the local economy will come under increased pressure and we will likely experience another quarterly contraction in GDP.”