Baby boomers are more likely than millennials to have less than $1,000 in savings as the cost-of-living crisis hits the older generation, new figures show.
Australian consumers aged 60 and 70 are often blamed for prolonging the inflation crisis, based on the theory that those who own their own homes without a mortgage have more money to spend.
But baby boomers, who are most likely to qualify for the old-age pension at age 67, are also more likely to be retired and therefore not have the cash flow from their wages to pay for life’s unexpected expenses, including medical bills.
When it comes to having less than $1,000 in the bank or saved, 15.1 percent of those born between 1946 and 1964 were in this dire situation, according to new data from financial comparison group InfoChoice.
By comparison, 14.7 percent of millennials born between 1981 and 1996 had no savings.
Generation Z adults, born after 1997, are least likely to be paying a mortgage, but have the least savings because they are more likely to be renting or paying off college debt.
One in five, or 19.1 percent of them, had less than $1,000 in the bank, and this group was most likely to spend money on tattoos, lip fillers and Botox.
This figure was only marginally higher than the 17 per cent of Australians from Generation X, born between 1965 and 1980, who are more likely to be paying a mortgage and raising teenage children.
Baby boomers are more likely than millennials to have less than $1,000 in savings as the cost of living crisis also affects the older generation, new figures show
However, the idea that baby boomers are driving Australia’s inflation crisis has some merit, as the survey also shows that one in three of them (or 29.2 percent) had more than $100,000 in savings to enjoy restaurant meals, new cars and cruises.
Harrison Astbury, financial analyst at InfoChoice, said baby boomers were surprisingly less conservative with money and many also fell victim to poor financial planning.
“The younger generation can be quite conservative in their approach to saving and wealth creation,” he said.
‘In contrast, there are the baby boomers: almost a third of them have savings of more than $100,000, however, a significant portion – higher than average – do not budget at all.’
In comparison, only 16.8 percent of millennials had more than $100,000 saved.
Only 6.9 percent of Gen Z were in this fortunate situation, compared to 19.3 percent of Gen X.
Regardless of age, Mr Astbury said Australians were turning to alcohol and drugs to cope with tough economic circumstances.
“People with higher incomes are more likely to use drugs and adult entertainment, while respondents with lower incomes tend to spend more on smoking and drinking, suggesting that a disproportionate number of low-income people are affected by the government’s ‘sin’ taxes,” he said.
‘It’s been a difficult time to manage the cost of living, save money and still find room for life’s pleasures, regardless of generation or whether you’re a mortgage holder or renter.’
Gen Z adults, born from 1997 onwards, are the least likely to pay a mortgage, but have the least savings because they are more likely to be renting or paying off college debt (pictured are young people in Brisbane)
Most respondents admitted to drinking and eating high-fat foods.
“When it comes to discretionary spending – life’s guilty pleasures – more than half of respondents admit to spending on vices such as alcohol, fast food and gambling,” Astbury said. “I consider the remaining 45 percent to be liars.”
More than 40 per cent of Australians were not investing money in growth-oriented assets beyond property and superannuation funds, in things like stocks, bonds, derivatives, cryptocurrencies or exchange-traded funds.
The younger Generation Z was even more risk-averse: half of them chose to keep their savings, beyond property and retirement, in cash.
The InfoChoice survey of 1,000 people was conducted in June and probed views on how savings were stored, from bank deposits to physical cash.