The high savings rate is an illusion

The traditionally quoted measure of household savings is fundamentally flawed, new research suggests.

Financial stability could become an overwhelming concern in light of the fact Australia’s savings rate actually isn’t as high as headline numbers flung around by the Reserve Bank of Australia and Australian Bureau of Statistics suggest.

In the RBA’s November statement on monetary policy, the central bank explains the savings ratio is around 10 per cent of income, hovering near decade highs.

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