MORE than half of households are cash-strapped at the end of the typical month despite the higher pace of savings in Australia in recent years.
And while there was growth in the share of households saying their financial situation had improved slightly in 2012, those who could not make ends meet were spending more cash over their income levels, according to the ME Bank Household Financial Comfort report.
''What's interesting is that the savings rate has gone up but the majority of Australians are struggling to save each month,'' said Jeff Oughton, chief economist at consultancy Economics and Beyond, which helped prepare the report.
The household savings ratio was 9.3 in the year to June 2012, representing about 9.3¢ saved for every dollar of disposable income. Australia's savings rate has hovered around 9.5 since 2008-09 when the financial crisis hit, making consumers more wary of spending. Before that, the ratio was 3.7 in the year to June 2008, according to the Australian Bureau of Statistics.
Households unable to save but able to make ends meet comprised 43 per cent of the 1500 homes in the ME Bank survey also conducted in June 2012. Ten per cent of households were not saving and going backwards in their finances, drawing on savings, loans, credit or equity in their home. Forty-seven per cent were managing to save.
''There are a lot of people under financial stress who don't have a mortgage and don't own a home,'' said Mr Oughton, who said home owners ahead in mortgage repayments, flagged by the Reserve Bank, should not be confused for the overall financial wellbeing of Australian households.