The survey of 1,000 Australians commissioned by MyState Bank has found of those who admitted to drawing on their life savings during the COVID period, one in 10 estimated they had drained more than half of their savings.
Half of the population reported they would not be able to afford a $200 increase in monthly household expenses.
Almost one-fifth (18 per cent) of respondents reported that the economic implications of the crisis have seen their household income decrease by more than a quarter.
MyState Bank general manager of customer experience Heather McGovern said that despite financial hardship assistance being on the table from the government and banks, many are still struggling to manage their finances.
“With financial support from the government winding back in September, many Australians are likely to feel the pinch even more,” Ms McGovern said.
“As a bank, we recognise the need to help our customers stay financially healthy during this time.”
According to the research, paying for essentials such as groceries (39 per cent) and paying for household bills (39 per cent) are the largest reasons why Australians are dipping into their savings.
“The economic implications of COVID-19 have caused many households across the country to redirect their savings to the basic necessities, shelving their big financial goals and decisions, at least, for the time being,” Ms McGovern said.
Almost a quarter of those needing to access their savings (23 per cent) reported they had initially planned to place the money towards a deposit or a first home, while one in five said the savings were going towards their retirement.
A further 25 per cent said they had been intending to use their savings for a holiday.
More than four in 10 (41 per cent) believe their finances will continue to be affected in the next six to 12 months by the COVID pandemic.
MyState has released the data as it has rolled out its new AI driven banking solution, embedded in its everyday transaction and savings accounts products.
The tool is designed to help consumers manage their spending, with features such as bill payment reminders and alerts to tighten their belts when it predicts they may not have enough to cover upcoming bills or everyday spending.
Given over 500,000 members have cleaned out their accounts (due to Covid19), at least they’ve put a stop to having their funds being charged intrafund advice fees for PERSONAL advice most members never receive.