Households added to their savings over the Christmas period

Close to half of all households added to their savings in the December quarter, indicating that Australians are maintaining conservative financial goals.

According to the latest St George Bank - Melbourne Institute Household Financial Conditions Report, the proportion of households that added to savings increased by 3.7 percentage points to 46.8 per cent during the three months to December. It was the biggest quarterly increase in more than two years.

Only 2.2 per cent of households reported that they had no savings.

St George Bank retail banking general manager Andy Fell said Australians with home loans reported that they were taking advantage of low interest rates to pay down their mortgages.

The number of respondents who said they would put their savings towards debt reduction rose by 3.9 per cent to 17.6 per cent of households during the quarter.

The proportion of households reporting that they had no debt rose 6.9 percentage points to 46.5 per cent.

St George chief economist Besa Deda said the higher proportion of households intending to reduce debt was an indication that consumer confidence remained "fragile".

The report's findings are in line with other consumer surveys released over the past couple of months.

According to ME Bank's latest Savings Intentions survey, low interest rates have not had any influence in changing Australians' conservative financial goals, with saving remaining a top priority.

ME Bank found that savings goals included paying off a mortgage, paying off debts, saving for a holiday, car or other large expense, building "rainy day" savings and saving for retirement.

ING Direct's latest Household Financial Wellbeing Index, found that almost half of all homeowners were making use of the current low interest rate environment to get ahead of their home loan repayments, with 44 per cent paying down ahead of time (up from 33 per cent a year earlier).

An ANZ-Roy Morgan Australian Consumer Confidence survey conducted earlier this month found that consumer confidence was below its average level of the past four years and has been stuck at that low level since the middle of last year. According to the survey report, this "lack of momentum" in consumer confidence suggests that households may be saving rather than spending.