New research shows rich Australians have more than 200 times the savings of the poorest

Photo: Scott Barbour/ Getty.

Fresh from getting a big tick from the IMF as one of the nations resisting the global trend of growing inequality comes research showing Australian savings are utterly unbalanced in favour of the top 20%.

This morning, Bankwest Curtin Economics Centre (BCEC) announced that “the inequality in the distribution of household savings is considerably worse than the much talked about inequality in incomes”.

Using the latest household income data, economists at BCEC have estimated that the average household disposable income of the top 20% of savers is less than four times those in the lowest savings quintile. However, their savings (averaging $1.3 million) is 200 times the bottom 20 per cent (averaging $6,000).

When the researchers are referring to savings they are looking at cash, money held in mortgage offset accounts, trust accounts, stocks holdings, superannuation, and “other”.

The data once again reinforces that there is nothing average about the average household. Rather, the data is skewed by the holding held in the top 20% of households. The BCEC itself says the typical median household, the one with as many households above it as below it, has only $100,000 in savings.

That means that the richest 20% of households have around five times more than the average of those households in the 60-80% band. Crucially for the fabric of society in the decades ahead, the top 20% hold more than 200 times the average of the poorest households. They even hold more than 10 times the average savings of a household in the middle band.


This skew towards wealthier households is obvious when total assets are tallied. The top 20% of households have three-quarters of household savings.

Given the changes to pension, including a longer working life and older age before it can be received, this data, when coupled with the level of debt in the economy, might help explain why Australian consumers and households are not responding to lower interest rates in a way the RBA thought they would.

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