As Australians grapple with the ongoing challenges of rising living costs due to persistent inflation and interest rates, many are inadvertently squandering hundreds of dollars annually on subscription services that are often unused or even forgotten. Recent research by Westpac indicates that one in three Australians wastes approximately $600 each year on redundant apps and services, while the average consumer overpays for subscriptions by about 20 per cent—an excess of around $14 monthly or $168 annually.
Westpac’s acting CEO for consumer services, Carolyn McCann, highlighted the allure of convenience driving Australians’ willingness to spend. However, the study revealed a concerning trend: consumers often underestimate their expenditure on subscriptions, spending an average of $14 more each month than they believe. While individual subscription costs may appear manageable, they can accumulate significantly, especially if the services are no longer being utilised. This results in potential savings of hundreds or even thousands of dollars that could be diverted to more pressing financial needs.
The research pinpointed that many individuals fail to cancel their trial subscriptions in time, leading to unexpected expenses. Almost a third of respondents admitted to paying for services they had completely forgotten about, while 31 per cent found the cancellation process overly complicated. Additionally, Australians now spend an extra $141 annually on subscriptions compared to the previous year, influenced by escalating prices from popular streaming platforms like Spotify and Netflix.
The data further suggests that gaming subscriptions represent the largest financial drain, with consumers shelling out an average of $55.50 monthly (amounting to $666 annually). This is followed by video streaming services at $21.63 per month, totaling $260 a year, and music subscriptions costing $16.98 per month, or $204 annually. In a related finding, Westpac’s customers reportedly spend a staggering $2,200 per year on takeaway food, reflecting a willingness to invest in services that enhance daily convenience.
The findings point to an increasing awareness of value among consumers, with spending on home and utility subscriptions witnessing notable growth. However, these services are perceived to offer the least value in return. McCann emphasised the importance of recognising these spending patterns, urging Australians to evaluate their subscriptions to avoid unnecessary expenditure.
In summary, with the rising cost of living, Australians are recommended to review their subscription services to identify unused or redundant ones, thereby reclaiming funds that could be better utilised elsewhere.