Financial burdens troubling Australians


By Leanne Abbas

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Stagnant wage growth and rising living costs were contributing to increased financial stress among Australian consumers, highlighting the value an adviser could provide, according to Mortgage Choice.

The firm’s “Evolving Great Australian Dream” white paper identified that 24.2 per cent of Australians were worried about money on a daily basis, while another 24.4 per cent of the study’s respondents said they were distressed about their finances on a weekly basis and a further 19 per cent were concerned on a monthly basis.

Mortgage Choice chief executive John Flavell told financialobserver the results indicated an opportunity for advisers to help consumers get their finances under control by reviewing their individual financial circumstances, as well as their short, mid and long-term goals.

“From there, an adviser would no doubt look at a number of advice strategies, depending on the client’s unique circumstances and goals,” Flavell said.

He identified the most common strategies implemented by advisers for clients who were struggling with day-to-day living expenses, including debt consolidation, cash-flow management and coaching, regular savings plans and additional loan repayments.

Commenting on the research, he said: “The finding that nearly a quarter of all Australians worry about their finances daily is a stagnating statistic.”

“That said, with the cost of living increasing and wage growth stagnating, I am not surprised to hear that Australians are worrying about their money.”

Furthermore, the Australian Bureau of Statistics’ latest wage price index outlined average national wages experienced growth of just 1.9 per cent between the December quarter 2015 and the December quarter 2016, a low figure by long-term standards, he noted.

“And while wage growth is stagnating, property prices continue to rise, with data from CoreLogic showing property values across the combined capital cities have risen 11.7 per cent over the 12 months to March 2017,” he said.

“In Sydney, property values are up 18.4 per cent over the 12 months to March, while Melbourne property values have soared 13.1 per cent over the same period.”

He said he expected a greater proportion of Australians to become financially stressed as property prices continued to rise along with the cost of food, gas and electricity, childcare fees and transportation.

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