7th Aug 2018
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One quarter of households under stress: report
Author: Janelle Ward
Couple worried about savings

About one quarter of Australian households have less than $1000 in cash savings, a new report has found.

And they are less capable of raising funds for an emergency than at any time in the past seven years.

The Household Financial Comfort Report says that more Australians are strapped for cash and are being forced to dip into their savings to cover rising living costs created by stagnant incomes.

Feeling the brunt were ‘empty nesters’ – those aged 50 and over – who reported a record low in their level of financial comfort.

Jeff Oughton, consulting economist for ME Bank which commissions the biannual survey of 1500 households, said more Australians were plundering savings to cover essential living expenses.

“You may think that empty nesters would have fewer financial worries – most have paid off their mortgage, their kids have flown the coop, the majority are still working and some have voluntarily retired,” he said. “However, many are still concerned about current finances as well as worried about their life after work, expressing an eight per cent drop in comfort with their expected standard of living for retirement, as well as a seven per cent fall in their ‘comfort with savings’.”

The report showed that the confidence of households to raise money for an emergency dropped three points below the average since the survey began in 2011, and fewer households reported that they were able to save.

The AIA Healthy Living Index 2018 released last month also showed that Australians were concerned about their ability to meet the potential costs of critical illness.

That survey found Australians faced a considerable ‘financing gap’ where savings, current levels of insurance and government health provisions might not be enough to pay for the treatment of critical illnesses such as cancer, heart disease and diabetes.

The Household Financial Comfort Report found that more Australians were overspending and that some feared their savings would be depleted.

“Currently, around a quarter of Australian households have less than $1000 in cash savings,” Mr Oughton said.

“If we see big negative shocks in the coming year, whether they are higher loan rates or an international trade war, then a lot more families will suffer increased financial stress.”

The latest report found that the cost of necessities continued to be the major concern, with more than half the household reporting it as their “biggest financial worry”, up seven points to 53 per cent. Similarly, when asked why their financial situation worsened during 2017–18, 44 per cent said it was due to the cost of everyday items.

Of households with debt, there was an increase in the number who were expecting they “will not be able to meet their required minimum payments on their debt” and “can just manage to make minimum payments on their debt” in the next six to 12 months – 43 per cent combined compared to 38 per cent in December 2017.

Mortgage and rental stress was high, but there was better news for renters.

“The good news for renters is that financial stress has lessened somewhat during the past six months, thanks to the housing market cooling and rents falling. While almost three quarters (72%) of renters were previously contributing over 30% of their disposable income towards rent, this number dropped significantly to two thirds (67%) in the most recent survey,” Mr Oughton said.

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    COMMENTS

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    Cowboy Jim
    7th Aug 2018
    10:37am
    Dipping into your savings I find normal as one gets older. Having credit cards contributed to the no savings philosophy - way back we were forced to save for a desired item and generally you had some bob tucked away. Today the card is always handy, use it myself, and it is easier to spend a bit more when you do not see the dollar bills changing hands. Force yourself to follow a budget, had to do exactly that when I finished work.
    jackie
    7th Aug 2018
    12:23pm
    Cowboy Jim...We live in a very different world today...this country is run by a government that only supports the rich not its people. Stagnant wages with perpetual lifestyle increases and debt does not leave families much to save.

    Big business is free to rip off all. Young people with massive education debt take about 5 years to get full time work if they are lucky.

    The rest of the nation juggles part time and casual work commitments while rich asians inflate the property and rental markets amongst a 25 million population Australia.

    The dole hasn't increased since 1994 in a country with new arrivals coming here every few seconds.

    People have to work for free to try or pay for police checks and other out of expenses to try and get work. That would be hard for those on the dole with job clubs that don't find them work but get paid big money pretending.

    There will be more homeless and desperate Australians to come. The cockroaches of our society will make sure of that.
    jackie
    7th Aug 2018
    12:44pm
    Cowboy Jim...We live in a very different world today...this country is run by a government that only supports the rich not its people. Stagnant wages with perpetual lifestyle increases and debt does not leave families much to save.

    Big business is free to rip off all. Young people with massive education debt take about 5 years to get full time work if they are lucky.

    The rest of the nation juggles part time and casual work commitments while rich asians inflate the property and rental markets amongst a 25 million population Australia.

    The dole hasn't increased since 1994 in a country with new arrivals coming here every few seconds.

    People have to work for free or pay for police checks and other out of pocket expenses to try and get work. That would be hard for those on the dole with job clubs that don't find them work but get paid big money pretending.

    There will be more homeless and desperate Australians to come. The cockroaches of our society will make sure of that.
    Old Man
    7th Aug 2018
    3:13pm
    Jackie, wages are not stagnant but have increased year by year since 1975 with the exception of 2009 when no increase was granted. The dole, as you put it, has increased year on year since the 1984 rate of $76.65pw to the current rate of $246.40pw.

    The rest of your post is xenophobic, unsupported garbage. I support your right to give an opinion but that doesn't mean that I believe it.
    Cheezil61
    7th Aug 2018
    5:01pm
    Agree with Jackie but watch us get blamed on ourselves for this predicament! This country is a mess & headed for much worse unless things change in the very near future!

    I know at least 3 young people very close to me that have been ripped off many hundreds of dollars in a short space of time by employers (unpaid wages & incorrectly paid wages) & nothing gets done about it when they report it, not to mention they are not having super paid in tho it gets taken from their wages!
    If these 'kids' stole from the bosses cash registers it would be a totally different story!
    jackie
    7th Aug 2018
    9:11pm
    Old Man...Many people have not had a pay increase for years as a matter of fact many wages have gone down. The dole has finally gone up to $278 a week after decades. Many sick Australians can’t get on the DSP and are stuck on the dole because they aren’t dead. There is nothing xenophobic about my previous post. I am stating facts. Something that you don’t like.

    Rents and properties are inflated due to high demand created by overseas investors thanks to greedy land developers.

    Wage theft and work rights abuse by employers have become the norm. I just heard that council rates in the western suburbs of Victoria are going up by 50%. I am sure other councils will follow suite. Greedy Governmets are keeping an eye on ordinary people bank accounts because they want all the money. Corporations and the rich have tax cuts, perks and legal loopholes to hide their wealth to get richer.

    Ordinary Australians are doing it harder than ever in Australia. Only the criminals are doing well.
    jackie
    7th Aug 2018
    9:23pm
    Cheezil61...I know some people that went to a police recruitment seminar recently....It was all about pulling money out of job seekers....You have to pay money up front to sit for a test...but pre practice tests...and other extra costs. Thousands of applicants don’t pass or get knocked back each year... Tram driver applicants have to pay for police check and driving history up front before they sit for test. Thousand each year fail. Who pockets the money from these dole bludgers? There is mass exploitation of workers every where. I remember when I was young you never had to work for free and employers paid for police checks and other things they demanded from a worker.
    Geminiwoman
    7th Aug 2018
    10:48am
    Wow, $1,000 in savings. I WISH.
    Sundays
    7th Aug 2018
    11:03am
    The ability to save and actually saving are two different things. We all know people who live way beyond their means. The words budget and savings are unknown to them.
    jackie
    7th Aug 2018
    12:40pm
    Sundays...Well off Australians live beyond their means...They are addicted to their luxury lifestyles and will use any means to get them hook or by crook.

    Poor Australians work in casual jobs that don't pay holiday and sick pay....Their work is intermittent...that is why they live off loans during those periods..then go back to work to pay off their perpetual lifestyle increases and debts....It's no easy saving when you don't have a regular and consistent income.
    KSS
    7th Aug 2018
    1:27pm
    jackie some of what you say is just not true. Casual staff are paid at a higher hourly rate (than permanent counterparts on the same hours) to cover their sick pay and holiday pay. Most casual worker are covered by an industry award that sets out rates of pay very clearly.

    Now you may argue they are not paid enough but that is a very different position to your assertion they are not paid at all.

    And just for the record not all Poor Australians are in casual employment. Some of them work permanent full time jobs complete with holiday and sick pay!
    Foxy
    7th Aug 2018
    6:16pm
    ..... companies that didn't pay!!! 7-Eleven - Domino's Pizza -

    ... their CEO's get millions of dollars per year - staff get underpaid and have to go to Fair Work Aust. - to fight for their Super!! Nice - not!
    Sundays
    7th Aug 2018
    7:01pm
    My point Jackie is that the article is misleading. There are people in high paid jobs who just can’t/won’t save and are in severe debt. There are others earning basic wages, who know how to budget and always have a nest egg. Some poor people are definitely doing it tough, but I’m always surprised at the number of unemployed who can afford to drink, smoke and gamble.
    jackie
    7th Aug 2018
    9:36pm
    KSs...Why do you think employers pay casual? Because it is a lot cheaper for them than permanent work. Permanent full time work is becoming less these days. Companies prefer casual because they can lay you off whenever and leave worker on the dole for weeks. Low income wages have gone down. Many workers are doing it harder than pensioners today. Some well paid workers have gambling addictions. Governments make money from the gambling industries. The police venues are full off comfortable Australians throwing their money away.
    patti
    7th Aug 2018
    11:38am
    Have been a good money manager all my life. However, it is not easy to manage money when there is not enough of it to manage. Savings......I wish!
    KSS
    7th Aug 2018
    1:24pm
    Me too patti. I was taught how to budget even as a small child getting 6 pence for pocket money i.e. a penny for church, a penny for Brownies, a penny for sweets (you could get a big bag full in those days) tuppence to save and a penny to with what I wanted!

    Those early lessons stay with you.
    Hasbeen
    7th Aug 2018
    11:42am
    It is government greed causing financial stress.

    I required over $3800 in the bank on the 15Th of January just to pay the council rates, car registration & an electricity that will have to be paid then. Rates & registration charges have skyrocketed, & the damn fool government love affair with wind & solar power is sending power bills through the roof.

    Add in house & car insurances at another $2500 & that meant $6300 went out between mid January & mid February. A lousy $1000 was not going to go far with that lot. It must be only those in public housing riding subsidised public transport who could survive without a lot more than that in savings.

    I recently moved my cat registration to March, & insurances to September to spread these costs a bit more evenly through the year. However at the current rate of increase the council rates will exceed a single pension in about 15 years.

    God we need to cull half the bureaucrats in this country.
    Hasbeen
    7th Aug 2018
    11:45am
    Sorry.

    Actually it is my cars, not my cat that costs so much to register.
    George
    7th Aug 2018
    12:23pm
    Yes, nasty Govts who have transformed this country from what was once a "lucky" country - by handling over our wealth to big business and wealthy leeches.

    Universal Pension is a MUST.
    jackie
    7th Aug 2018
    12:52pm
    Hasbeen....Cars, insurance and pets are luxuries on a pension. Most people on low incomes can't afford them. That is a fact.
    Hasbeen
    7th Aug 2018
    3:13pm
    You have to eat cheap, & buy clothes at the opp shop jackie
    Old Man
    7th Aug 2018
    3:17pm
    Hasbeen, you're very quick to blame the government but your financial woes, as I see it, have very little to do with government. Rates are a local council matter, electricity is provided by private enterprise, insurances, again, private enterprise. Sure, car registration is a state government matter but to blame the "government" for all of your problems is a bit of a stretch.
    jackie
    8th Aug 2018
    10:53am
    Old Man....You seem to forget they all are governing bodies....yes the Government encourages them to hike the prices because then it doesn't have to distribute so much money to the states.
    Noodles
    8th Aug 2018
    5:16pm
    Pray tell where are the taxpayers going to come from to pay universal pensions?

    On news the other night there will be 2.7 people having to provide for one person on welfare in coming years.

    Universal pension will never happen.
    George
    7th Aug 2018
    12:30pm
    "Australians faced a considerable ‘financing gap’ where savings, current levels of insurance and government health provisions might not be enough to pay for the treatment of critical illnesses such as cancer, heart disease and diabetes."
    Totally failed Health system where Medicare + a stupid Private Health (so-called) Insurance system doesn't cover all expenses - needs urgent and complete overhaul!
    Rosret
    7th Aug 2018
    2:02pm
    So right now I think its time to think of the farmers.
    They have no food, no water, no ability to buy anything and their animals are starving.
    So rather than worrying about those who don't save and will however have a guaranteed income payment next week LET US GET SOME EMERGENCY SUPPLIES out west.
    Today.
    jackie
    7th Aug 2018
    9:51pm
    The farmers are receiving Government help. Keeping animals alive to slaughter is not a caring act.

    I feel for the suffering animals. Livestock farming is not sustainable in a country that is going to get drier. They need to change their farming methods that don’t require so much water. I haven’t touched meat for decades. There is protein in everything. Where do you think livestock gets theirs from? Plants.

    7th Aug 2018
    2:35pm
    I'd question the accuracy of the report
    1/4 of households ?
    Sounds very unlikely, especially when you look at stats showing the high number of self and partially funded retirees - 60% +
    Rosret
    7th Aug 2018
    2:45pm
    I would say it is correct. The younger generation live week to week with huge home mortgages. I doubt the money in super is counted for this article - just bank accounts.
    jackie
    7th Aug 2018
    9:55pm
    Many Working Australians are accessing their super during periods of unemployment so that they don’t lose their homes. This is the super That’s supposed to keep them after they reach 70.
    melbgirl
    7th Aug 2018
    3:12pm
    The good news for renters is that only 67% are in rental stress! Wow, only two thirds of people renting are in unaffordable housing. Presumably the 33% not in financial stress are high income households. Thats a huge part of the population struggling to afford a roof over their heads before eating and other basic needs. Very hard to save and break the cycle under these conditions.
    jackie
    7th Aug 2018
    10:07pm
    Job insecurity can be a pay away from homelessness.
    Charlie
    7th Aug 2018
    4:04pm
    There's a lot of us aren't there
    floss
    7th Aug 2018
    5:49pm
    Yes the gap is getting bigger in the last three or four years, not hard to work it out. You voted this mob in now you have to wear it.
    Anonymous
    7th Aug 2018
    6:10pm
    flossy, actual this government was a very easy choice after the rudd, gillard, rudd, hopeless and inept government,
    jackie
    7th Aug 2018
    10:01pm
    Floss...There must be a lot of wealthy Australians.
    Noodles
    8th Aug 2018
    5:19pm
    There are a lot of people who know how to manage their money and are doing well. It has nothing to do with large paypackets either.

    Financial literacy is sadly lacking in Australia and kids need to be taught at an early age how to handle money and to live within their means.

    Living on credit leads nowhere.
    MD
    7th Aug 2018
    8:31pm
    I reckon the god botherers would have it - "the poor you will always have with you" which of itself isn't likely to sit comfortably with those nearest them on the slippery slope. But hey! every cloud has a silver lining so instead of seeing the poor dragging you down try imagining that by standing on their shoulders you can gain that extra ground.

    Paupers keeping the company of those they imagine to be slightly better off may be ipso facto therefore feel better off themselves. Isn't it all relative, so why premise the article on a thousand dollar value as constituting the bottom line ? A grand to a long term welfare beneficiary might seem a fortune yet too little information is available to determine why a thou is considered rock bottom. How much is considered enough to satisfy everyman's (imagined) contingencies, who determines the amount, how is it determined ?

    And society, regardless of which political party holds the reins, will carry the day for the down, out and destitute. No statute of limitation currently exists to restrict the bottom line to meet with everyones' satisfaction. That which satisfies one party will meet with the indignation of another.
    GrayComputing
    8th Aug 2018
    11:43am
    It is time for all of us (that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    Does your MP really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

    Some opposition and independent MPs stand to lose their chance at being part of the needed government changes

    We all need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

    Also contact opposition and independent MPs (today) who could help us to get a fair deal on pensions
    MD
    9th Aug 2018
    6:44am
    Pretty well set up for your retirement I take it GreyComputing ?

    Too much stress staying abreast of the system ?

    "Most economists" wouldn't know Arthur from Martha, even if they could hazard a guess they're highly unlikely to divulge their knowledge unless some sucker's prepared to cough up the quids: most of that is held/controlled by either the gubbermint or any one of their many sycophant's so good luck there.

    "Become (ing) a hero" generally involves some pretty tricky business and far too many of em end up being shot.

    Might just be best to stick with the devil you know as opposed to stickin your neck out cos someone's sure as hell likely to land a blow.
    DeepBlue
    9th Aug 2018
    11:45am
    We were warned about these outcomes, but we chose to ignore. Thomas Jefferson's (3rd President of the USA 1801 to 1809):

    “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

    Banksters' misbehaviour was seriously curtailed following the Great Depression (1929-39) they created (for their financial benefit), because governments imposed sensible restrictions on their predatory activities. The world saw growth and people saw more money in their pockets as a result. These regulations were eroded and removed in the 1970s and 1980s and we are now living with the accumulated consequences of a massive shift in wealth distribution around the world (see 2015 OXFAM Charity report: http://www.theguardian.com/business/2015/jan/19/global-wealth-oxfam-inequality-davos-economic-summit-switzerland and https://www.oxfam.org/en/pressroom/pressreleases/2018-01-22/richest-1-percent-bagged-82-percent-wealth-created-last-year) which has destroyed economic activity.

    Us Baby Boomers have failed to build a society that allows our children to earn a living wage. And this also threatens our retirement. We have presided over a disastrous shift in wealth distribution around the world, and the consequences have seriously crippled economic activity. Daily life - in a financial sense - is now far more difficult at all levels of society; apart from the top 1%.

    Listen to this smart USA billionairre: https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming

    And recall the words of this member of the Rothschild family, which presently owns/controls most Central Banks in the world, and thereby directs the banking system:

    “Let me issue and control a nation’s money and I care not who writes the laws.”
    - Mayer Amschel Rothschild

    The recently appointed new head of Australia's Reserve Bank had his last job at the Bank of International Settlements, the central bank of central banks, also owned by the Rothschilds, for their personal financial benefit. Check the internet for the name of the richest family in the world and notice how far ahead they are of anyone else. They don't own an oil well, their money comes from fleecing us.

    The consequences of this corrupted banking system include:

    “The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities states and nation. At the head is a small group of banking houses generally referred to as ‘international bankers.’ [THE ROTHSCHILD/ROCKEFELLER FAMILIES!] This little coterie… runs our government for their own selfish ends. It operates under cover of a self-created screen…[and] seizes…our executive officers… legislative bodies… schools… courts… newspapers and every agency created for the public protection.” -John F Hylan (NY City Mayor 1918 to 1925)

    "Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money." Sir Josiah Stamp 1880 -1941 (industrialist, banker, economist, writer, civil servant)

    British philosopher Edmund Burke warned us too:

    "The only thing necessary for the triumph of evil is that good men do nothing."

    If we want this changed, and we want a better place for our grandchildren, banking as we now know, needs to end. Given who controls whom, it's unlikely we'll see Seal Team 6 raiding banking institutions around the world and tossing the bullet riddled bodies into the sea. But a Gray Revolution could work; in time to avoid the pitchfork outcome which Nick Hanauer predicts if nothing is done.

    Time to stop talking and take action. Fill the streets. We did it before with the Vietnam War. Now it's needed to reverse our own stupidity. Force the hand of government, kick out the criminal banksters (see http://www.fool.com/investing/general/2012/12/20/an-infographic-on-2012-bank-scandals.aspx and http://www.theguardian.com/business/2014/nov/26/banking-toxic-culture-generation-clean-up-thinktank) and make the world a better place for our grandchildren. And to prevent the horrific pitchfork style events which Nick Hanauer predicts if we continue to do nothing so our grandchildren become slaves to the new fuedal elite; banksters.
    Muriel
    12th Aug 2018
    12:42pm
    75 plus are also suffering from rapidly diminishing savings ....especially singles with no super.....Many have large family homes requiring expensive maintenance & repairs
    Many help to support single parent families with young grandchildren requiring costly sport equipment, club memberships, orthodontics, school camps, uniforms, clothes, food, etc
    My daughter, left an abusive partner, has 3 young children & would've been homeless, if not living wth me.....I'm a widow, enjoy their company & love them all but the rising costs are crippling....despite us trying to budget
    Noodles
    12th Aug 2018
    2:51pm
    No wonder some empty nesters are feeling the financial strain. How many have their "grown up"!!! kids still living with them and many contributing very little to the coffers.


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