A large number of Australians would struggle financially if they lost their job despite interest rates being at a record low.
House rents in every capital city, except Melbourne, have risen during the past year while the banks are starting to increase their fixed mortgage rates, sparking fears of loan stress from 2023.
With living costs rising again, 42 per cent of Australians are living pay cheque to pay cheque, an online Finder survey of 14,544 consumers found.
That equated to 7million Australian adults who were struggling financially.
Alarmingly, little more than a third - or 36 per cent - could live off their savings for four months if they suddenly lost their job.Insurance Loans Mortgage Attorney Credit Lawyer
A large number of Australians would struggle financially if they lost their job despite interest rates being at a record low. Pictured is a Centrelink queue on the Gold Coast in March 2020
Less than a week: 11 per cent
One week: 6 per cent
Two weeks: 8 per cent
Three weeks: 4 per cent
One month: 13 per cent
Two months: 9 per cent
Three months: 13 per cent
Four to six months: 12 per centInsurance Loans Mortgage Attorney Credit Lawyer
Six to 12 months: 8 per cent
More than a year: 16 per cent
Source: Finder online survey of 14,544 Australians taken in April 2021
One in ten, or 11 per cent, would only be able to last a week on the money in their bank.
Only 16 per cent would be able to last a year living on their savings without a job.
Finder's personal finance specialist Taylor Blackburn said Australians needed to save more in preparation for an uncertain labour market.
'Millions of Aussie households are living hand to mouth,' he told Daily Mail Australia.
'Although you may be able to keep your head above water, any unforeseen expenses could pull the rug out from under you.
'No matter how stable your job, you should always try and prepare for the worst.'
In a sign of worry, Australians are in fact saving more with overall bank deposits rising by 12.43 per cent in the year to March 2021 to $124.1billion, Australian Prudential Regulation Authority data showed.
RateCity.com.au research director Sally Tindall said the banking regulator figures demonstrated the Covid pandemic had encouraged Australians to actively save.
'Covid has been a financial wake-up call for many Australians,' she said.
'Since the pandemic hit, many families have put their personal finances first, getting themselves into a stronger position so they can tackle future challenges.'
House rents in every capital city, except Melbourne, have risen during the past year. Domain data showing national house rents had increased by 4 per cent in the year to March to $471 a week. Pictured are units at Cronulla in Sydney's Sutherland Shire
Borrowers are being urged to brace for higher repayments even though three of Australia's big four are offering fixed home loan rates of less than 2 per cent, with ANZ the exception.
Nonetheless, Westpac late last month announced it would increase by 0.3 percentage points its four and five-year fixed rate for