During the pandemic, Australians saved around $300 billion.

$80 billion went into mortgage offset and redraw facilities. 

$220 billion into ‘other’ savings, but of those ‘other’ savings, it’s estimated $140 billion has now been spent. 

To make matters worse, the rate at which we’re saving has plummeted from a high of more than 20 per cent in 2020, to just 1.6 per cent.

What savings we do have left are expected to be exhausted by the end of the year.

So as inflation continues to blow a massive hole in the family finances, and our pandemic savings pots run dry, what comes next? 

Financial journalist James Kirby told The Project that Australian’s have to start saving again. 

“We simply cannot continue winding down savings like we are, and basically billions being spent each month and it is being spent on everyday items,” Kirby said. 

“The Commonwealth Bank has explained that by the end of the year, $120 billion will have basically been drained out of savings accounts across Australia and we have a savings rate which is at one of the lowest we've ever seen.”

Kirby went on to say it was concerning people were raiding their savings just to buy the basics. 

“It's alarming because people are spending savings, on everyday items, and so if you look at the situation with retail spending right now, it is quite soft,” Kirby explained.

“If you look at shopping strips, you see how shops are struggling and even at that, people are spending their savings to achieve the retail spending going on, so when you stop that, retail will find it harder.”