Impact of the pandemic on household income and school fees

Woman-viewing-budget-on-laptop

The economic impact of the pandemic over the past two years has resulted in families being less prepared for increases to the cost of living.

Financial analysis of 2,000 households by Edstart found that income has remained stable during the period while both costs and debt have significantly grown. As Australians faced COVID-19 restrictions, lockdowns and border closures, the impact sectors including tourism, hospitality, retail and education were far reaching.

Household income remains stable

Average household income has remained roughly the same over the past two years due to factors such as job losses, reduced income on JobKeeper, insecure income for casual workers and reduced revenue for small business owners.

2020-2022-average-household-income

Families took on more debt

Households have incurred more debt during the pandemic. Property prices continued to grow despite COVID-19 disruptions, with the average mortgage balance increasing by roughly $30,000 and some families refinancing their home loans.

Mortgage-Balance-2020-2022

Percentage of other loans to income also increased as more families impacted by the pandemic turned to other ways to fund their living expenses.

Percentage-of-Loans-To-Income-2020-2022

Rise in living expenses

The cost of living has continued to increase for households during this period, with inflation rising to 3.5%. This has resulted in household expenses going up with a 2.45% rise in cost of housing to income ratio and 13.7% in percentage of income used for other expenses.

Household-Expenses-To-Income-2020-2022

Household budgets are not as resilient

With the continual rise in cost of living and expected interest rate hikes, the average household is not as prepared to cope with additional pressures on their budget after the past 2 years.

Many families are also paying higher school fees this year and will need greater flexibility with their school fees. By enabling parents to align payments with their budget, we’re able to help remove the stress of managing school fees and reduce the need to review schooling arrangements for their children.

About Edstart
Edstart is a leading technology and financial services company providing funding and payment services for education. We offer fee management solutions to schools and flexible payment plans to parents to help make school fees easier to manage.

To see how we can help you, visit our main website.

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