Parents concerned about financial stability

Parents are concerned their children may not be able to achieve financial stability

17-May-2017

By Daniel Paperny

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The inability of young Australians to attain an acceptable level of financial stability and independence would have consequences for their parents, families and generations to come, according to a new report by automated adviser Stockspot.

The Stockspot and Galaxy Research “Future Affordability Report” surveyed 1005 respondents across Australia, focusing on parents of children aged 17 or younger.

While over nine in 10 (94 per cent) expressed concerns over housing affordability and its implications for younger Australians, one in five (20 per cent) parents believed they would be unable to help their children finance their first home.

Stagnating wage growth, the rising cost of education and increasing household debt were all identified as barriers to financial stability, but the report also suggested low levels of financial literacy and poor discipline in relation to savings habits among young Australians had collectively hindered their financial freedom.

Stockspot founder and chief executive Chris Brycki said the survey was conducted to help understand parents’ views on their children’s financial futures.

Brycki noted the research suggested parents were acutely aware of how rising costs could impact on future generations, but had low levels of confidence when it came to investing.

“Education is vitally important; too many parents think they ‘don’t get it’ and don’t teach their children about the value of compound returns,” he said.

“Or they think it’s too risky because they had a bad experience stock picking.

“Saving early and frequently is the single most effective action a parent can take to help children get a financial head start.”

According to the report, 68 per cent of parents surveyed said they were open to putting money into a bank account if they were to start a savings strategy for their children.

However, less than one in seven (just 13 per cent) said they would allocate the money towards a share portfolio.

“While implementing a savings strategy and putting money in a bank account is certainly a wise thing to do, children would historically be far better off with money being placed into a higher-growth investment portfolio over a period of 10 to 20 years,” the report said.

“Stockspot believes [education and starting now] are the two vital tools any parent can use to help make a real difference to their children’s future financial stability.”

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