It was revealed this week that for every Australian that there are 10, $100 notes in circulation. You might be thinking, so what? But when you consider that there are only seven of the more commonly seen $20 notes for each Aussie, it becomes a bit of a head scratcher.
But a former Reserve Bank of Australia official, Peter Mair, thinks he’s found the reason and that reason is old people. That’s right; senior citizens hiding, burying and stuffing their mattresses full of cash to make sure they qualify for the means-tested pension.
“For those people looking to qualify to get the pensioner concession card and to draw a part-pension it makes a lot of sense to manage your assets in a way that converts some into anonymous cash,” Peter Mair told ABC Radio.
He also estimates that the average pensioner couple could be hiding up to $50,000 worth of undeclared $50 and $100 bills. And for one older timer on the radio, that figure is right on the money.
“$65,000 went into my garage, well I won’t say where but it’s there in $100 and $50 notes,” the caller, identified as Brian, told radio station 3AW.
Top hiding places
So where do people like to squirrel their money away? A recent poll conducted by British comparison site Confused found that the bedroom is the most popular hiding place for cash, with 30 percent of survey respondents admitting they kept cash stashed under the mattress or in the underwear drawer.
A fifth used a piggy bank or money box and about 7 percent of people opted for extra security by keeping the money hidden under their floorboards.
Earlier this month a California man made headlines after he passed away, leaving an estimated $US7 million in coins hidden in his house and garage. Authorities said some of the coins were disguised in boxes marked “books”, while others were found wrapped in aluminium foil and stored in ammunition boxes.
Meanwhile, a Sydney man who hid $15,000 in cash in his oven was left with a colourful mess after his wife turned it on earlier this year.
“Some people, especially of an older generation may not trust the banks as much as the rest of us do and that’s a perfectly legitimate reason [in their minds] for hiding cash away from prying eyes,” financial commentator Tom Elliott told Ten’s The Project.
For whatever reason you may keep large amounts of cash stored at home, be aware of the risks involved. Some home insurance policies may only cover cash stolen from the home up to a certain amount, if any. If your stash exceeds this figure, then you may not have a leg to stand on.
For those Australians needing reassurance that their money is safe with the banks, Treasurer Wayne Swan said this in a statement last year: “We have one of the most generous and secure deposit insurance schemes in the world”.
That’s because the Australian Government guarantees bank deposits of up to $250,000 held in Australian-licensed banks, building societies and credit unions. That’s slightly less than the equivalent of a $288,000 deposit scheme in the US, but it is more than double programs in Canada and Japan. Britain protects the equivalent of $167,000 in savings.
While a deposit account may not be as creative a hiding place as an oven or your floorboards, a savings account or term deposit is a secure place to stash your cash. And unlike the mattress, it could help your lump sum to grow!