The latest Household Financial Comfort Report from ME reveals a marked deterioration in the confidence of Australian households with regard to their ability to manage debt over the next six to 12 months. Out of 1,500 households surveyed, 10 per cent expressed this sentiment as compared to only five per cent in the past year.
ME’s overall Household Financial Comfort Index--which measures households’ perceptions of their financial comfort--dropped significantly by four per cent in the six months to June 2016. Only 10 per cent reported high comfort, as opposed to 90 per cent that reported low-to-mid financial comfort.
Baby boomers’ comfort fell the most out of any generation by seven per cent--the lowest level reported for that age group in the past two years. It is lower than Gen Y but still above Gen X. Retirees are still the most comfortable among all age groups, although they also reported their lowest levels of comfort since the survey began.
Renters are also feeling the pinch as their comfort level is significantly lower than homeowners and households paying off their mortgage. In fact, the gap continues to widen.
Financial comfort also fell in all states and territories, except in South Australia and North Territory, where financial comfort is highest despite the recent spike in the unemployment rate.