Increased volatility across share markets and concerns about the global economy have contributed to an acute decline in financial comfort levels among Australians.
ME’s (formerly ME Bank) latest Household Financial Comfort survey shows that confidence in coping with a financial emergency fell 11% in the six months to the end of June.
This was a large part of the overall 6% fall in household financial comfort, as this chart shows:
- Increasing concerns about the cost of necessities (up 3%), having cash on hand (up 3%) and being able to make ends meet (up 5%)
- Comfort levels associated with cash savings fell 9%
- Comfort with job availability took a 9% dip
- Gen Y and pre-retirees reported the biggest falls in overall financial comfort, both dropping by 10%
- Renters are feeling the pinch more than home owners with overall financial comfort down 12%, double that of the average Australian
Overall Australians had a relatively prudent approach to spending and finances during the first half of 2015.
“Spending caution still prevails with aggregate savings edging lower from historical highs,” the report says.