Australians increasing savings to pay down debt: ING Direct

The ING Direct financial wellbeing index has improved in this quarter from 105.6 to 106.9, and more people are increasing their savings rate to pay down debt.

However, 24% of households said their income had decreased in the past 12 months.

The number of people looking to start an online business in the next 12 months increased from 1% to 7%, with 6% of people also saying they want to start a business in general, up from the previous result of 2%.

The survey also showed that Victorian borrowers were most comfortable with their level of mortgage debt.

ING Direct executive director Rob Hendriks says that although some Australians feel they remain under financial pressure, they are "very clever" at finding ways to make money.

"Australians are very creative in boosting their income. We see an increased effort in selling goods online, taking additional jobs, and especially in New South Wales we see a lot of women entering the workforce."

"People are creative in finding ways to make money, and especially, people are looking for opportunities in online stores."

Hendriks says online stores are attractive, as people can potentially work part-time, without requiring a lot of investment.

He also points out one in 10 households are finding ways to sell household possessions without buying new ones, earning cash through sales. Also, 9% say they sell goods for extra cash, while 8% are doing odd jobs.

The results reveal a positive picture overall, with 46% of households saying they earn more than they did a year ago – and that increases to 55% in Western Australia. 68% of households say they are comfortable about savings – the median rate is $7,500 – although 20% of households have no savings at all.

Hendriks says although there are some downsides, such as 29% of 55-69 year olds having lower incomes than they did last year mostly due to cuts in working hours, the overall picture is good.

"There is some obvious negative news for some direct groups, but I think definitely the picture has improved."

"One in four are facing reduced incomes, yes, but the positive news is that 46% are earning more than they did a year ago."

Hendriks says while the overall economic situation is challenging, consumers are focused on savings and paying down debts.

"That's a mature response, and the overall Australian situation is still positive."

This article originally appeared on SmartCompany.