Financial wellbeing at record high: report

31-Oct-2013

By Caitlin Scarr

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Australian households are experiencing the highest levels of financial wellbeing in three years, with concerns over savings at record lows, according to an industry index.
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The ING Direct Financial Wellbeing Index showed Australians were enjoying the highest level of financial comfort since the index began in 2010.

The index score for the third quarter of 2013 was 111.5, up from 107.8 in the second quarter of the year.

Comfort levels across all six of the index’s indicators rose in the third quarter, the company said yesterday.

In particular, comfort with both long-term debt (mortgages) and short-term debt (credit cards) was very high.

Households indicated long-term and short-term debt were very manageable.

Seven out of 10 households or 69 per cent said they were ‘very comfortable’ with their mortgage. This figure was up from 65 per cent in the second quarter.

The index found 60 per cent were ‘very comfortable’ with their credit card debt. This figure was up from 55 per cent in the first quarter.

One in five, or 21 per cent of households, said they were ‘very comfortable’ with their ability to pay household bills, which was the highest proportion recorded since the index began.

Household saving discomfort was at its lowest, with only 25 per cent of households indicating they were ‘very uncomfortable’ with their saving ability
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“Low interest rates and improved confidence have given households a tremendous boost – especially in the key areas of home loan and credit card debt,” ING Direct executive director of customer John Arnott said.

The six index indicators were personal financial wellbeing, savings, household debts, household income and the ability to pay bills.

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