Average household debt grew by 7.3 per cent to $261,492 in 2021-22, according to the latest figures from the Australian Bureau of Statistics (ABS). Katherine Keenan, ABS head of Finance and Wealth, said “the dataset released today includes timeseries from 2003-04 to 2021-22 for five household indicators including equivalised disposable income quintiles and age of reference person”.
Debt and gross disposable income
Average household debt was $261,492 in 2021-22, while average household gross disposable income grew 3.7 per cent to $139,064. When compared to the average of all households, the highest income quintile held 1.98 times the debt, and 2.07 times the gross disposable income. In comparison, the lowest income quintile held 0.43 times the debt, but had 0.39 times the gross disposable income relative to the average of all households. “The fourth quintile had the largest discrepancy between debt (1.26) and gross disposable income (1.11) when compared to the average of all households” Ms Keenan added.
Deposit assets (includes savings and offset accounts with banks) provide liquidity buffers for expenses households may not be able to cover with their disposable income. In 2021-22, the average deposit assets held across all households grew 11.6 per cent to $144,669. Compared to the average of all households, the second income quintile had 0.66 times the deposit assets and 0.52 times the debt. The lowest and highest income quintiles also had higher deposit assets ratios than their debt ratios, relative to the average of all households.
“The lower income quintiles have higher proportions of retirees, who are likely to have larger deposit assets and lower levels of debt. For example, households with a reference person aged 65 and over, had 1.49 times the deposit assets of the average of all households, but only 0.18 times the debt. In comparison, households with a reference person aged from 35 to 44, had 0.53 times the deposit assets but 1.73 times the debt of the average of all households” Ms Keenan said.