The financial situation of Australian households has deteriorated over the last quarter, yet more Aussies are willing to spend their savings – the Australian Broker Online reports

The St. George and Melbourne Institute household financial conditions index decreased 7.9% to 122.2 in March, which is 1.8% below its value a year ago.

The proportion of households adding to their savings decreased four percentage points while the proportion of households that were drawing on their savings reached the highest level in nearly 20 years at 15.6%.

It shows a marked change from the previous quarter, which recorded the biggest annual improvement in financial conditions for Australian households since the survey first launched nearly 20 years ago.

The index increased 4.3% in December to 132.6, the highest level since 2009. That result was the fourth consecutive quarter increase and a rise of 9.3% over 2013.

But the research authors, after surveying 1200 respondents, put the deterioration in household financial conditions in this quarter down to more households drawing on their savings, and said Australians were easing their consumer cautions which will help support economic growth.

Nearly four in five households remain in a stable financial position, although there was  a decline of 5.9% on the previous quarter. During March, 44.6% of households put savings away.

The proportion of households holding mortgages rose to 40.2% in March, corresponding with stronger demand for housing.

But those trying to save may be thwarted still – renters experienced a decrease in their financial conditions as rents continue to increase.

John can be contacted on 0749722081 or 0410433919. You can also email him at jwhitten@ihl.net.au or look him up on the net www.ihl.net.au. John Whitten is a credit representative (CRN 399796) of BLASSA Pty Ltd (Australian Credit Licence No 391237