The National Mortgage Survey has revealed Australians are neglecting to plan for their financial future, with only one in seven saying they have a comprehensive plan in place. But for those with a home loan, 75% appear very likely to make extra repayments.
As a result of falling interest rates, three-quarters of Australians with a home loan have expressed intentions to make extra repayments if their mortgage repayments decrease as a result of dropping rates. They also consider putting extra money into savings with more than half saying they were likely or very likely to do so.
The poll, commissioned by CUA, found that only 5% of those with a home loan were very likely to treat themselves to a holiday, dining out or other hobby, while one in four ruled it out entirely.
It also added that one in seven Australians with a variable interest rate mortgage were considering to move to a fixed interest rate within six months.
CUA is the country’s largest customer-owned provider of banking products and services.
In terms of personal finance, more than half of Australians admit they have no financial plans in place. Almost two thirds of the respondents aged 40 to 49 haven’t mapped out anything for their finances in the next five to 10 years, while 42% haven’t even thought of any sort of financial planning.
“It’s alarming that so many Australians are failing to look ahead. Without a clear plan in place to manage their money and grow their assets, people are missing an opportunity to set themselves and their families up for a comfortable and secure future,” CUA head of Partnership Products Ren Mazza said.
“In particular, it’s worrying that so many Australians in the later years of their working life – those who have only 15-20 years until they reach retirement age – haven’t got financial plans in place. In fact, less than 1 in 10 people aged 40-49 said they had a comprehensive financial plan in place for their property, investments, insurance, savings and budget.”
A different scenario can be seen for Australians aged 25 to 29. One in five said they had a comprehensive financial plan for the next five to 10 years.
However, for Jason Kriss of Bridges Financial Services, “very few young people had longer term investment plans in place. Instead, they tended to focus on more short-term goals and assets like a car, or supporting their family”.
Kriss, head of Alliance and Distribution, also claimed that Australians earning a higher income and those with a mortgage were much more likely to have financial plans in place than lower income earners and non-mortgage holders.