Australians struggling to cope as cost-of-living pressures bite: Choice survey

Updated

Australians are dipping into their savings, delaying purchases and using their credit cards to bridge the gap between pay days, according to a new consumer survey.

The Choice Consumer Pulse Report has highlighted a range of cost-of-living pressures facing Australians with one third of people surveyed saying they find it difficult to get by on their current income, and two-thirds saying they have cut back spending on non-essential items.

Less than a quarter of people say they are feeling comfortable on their current income, and the price of electricity, fuel and food are the biggest concerns.

Choice CEO Alan Kirkland says it shows households are doing it tough.

"The people that are struggling the most are certainly people on low incomes," he told the ABC.

"And when we look into that further, renters are really struggling a lot more than people that are trying to buy their own home - but also families with young children, which is not surprising because they're households that face the biggest burden when it comes to things like electricity, fuel, food and groceries and health and medical costs.

"Some of these findings reflect what's actually happening, we've seen electricity costs go up massively in the last five years, way beyond the rate of inflation and it's no surprise that people are saying that they are the biggest cost-of-living concern.

"There are a lot of people doing it tough, but also a lot of people who aren't living comfortably but they're certainly concerned about how well they can get through to each pay day based on their current income."

Respondents planning to cut spending further in coming year

Forty per cent of those surveyed said they had delayed a major expense or purchase in the past 12 months, and 35 per cent say they dipped into savings to cover the gap until payday.

Twenty-two per cent said they had deliberately missed or delayed paying a bill, and 19 per cent have used a credit card to cover the gap until pay day.

Mr Kirkland says many of the survey's respondents reported cutting back spending on essential and non-essential items over the past 12 months, with plans for further cuts to spending in the coming year.

"Over 60 per cent have cut back on non-essentials, and when we asked them what they're likely to cut back on in the next 12 months they name items like clothing, entertainment and holidays," he said.

"Now they're all concerns because the retail and hospitality industries are major parts of our economy and major employers so if we see people cutting back on those areas it will have knock-on effects through the economy."

The retail sector has already been grappling with a challenging year, with warmer than usual conditions in autumn and early winter affecting fashion sales.

Australian Bureau of Statistics figures out this week showed sales had improved slightly.

Retailers will be hoping consumers find some money in their back pocket to spend on clothing and entertainment heading into spring.

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Topics: business-economics-and-finance, consumer-finance, consumer-protection, retail, industry, australia

First posted