A new study has revealed how financially conscious Australians really are, with Baby Boomers emerging as some of the most – and least – aware when it comes to money matters, compared to other generations.
Those aged between 55 and 64 came out as the most financially conscious, scoring 52.5 out of 100, meaning they are taking time to consider their financial circumstances and taking steps to ensure they’re prepared for the future as they approach retirement.
However, those over-70 were found to be far less financially conscious, scoring just 47.8 out of 100 which placed them in the ‘it’s a blur’ category, according to the Financial Consciousness Index developed by Deloitte Economics.
The study, conducted by comparison website comparethemarket.com.au, highlighted a stark difference within the Boomer age group, with 39 per cent of those born between 1946 and 1964 being classed as financially vulnerable.
Compare the Market’s General Manager of Banking Rod Attrill told Starts at 60 that the study’s findings were worrying for those deemed less financially conscious, with the results found to have a direct relationship with overall financial wellbeing.
“One of the things that stuck out is that 55-64 year olds are very, very focused on heading towards to retirement, so they’re being very, very particular about spending, about where they should be putting their money and if they should be putting more money into super at that stage to try and make it a little better as they heads towards retirement,” Attrill said.
“On the converse though, the worrying thing is once they’ve got to retirement and they start to hit 70 their scores really reflect that they may not feel they have as much control or that they are able to make changes as they need to.”
The findings also revealed that Generation Z are the least financially conscious demographic scoring just 46 per cent, with factors such as age, income and home ownership contributing towards their low score. While Millennials actually fared pretty well scoring higher than the average Aussie at 51.6 per cent.
Attrill added that the poor performance of younger generations could be down to the fact they are not yet on the property ladder or have not started their careers.
However, he added that the lack of financial consciousness among senior Aussies was most likely down to the fact that they are used to living to a fixed income – whether that may come from their age pension or superannuation scheme – which can lead to wariness when it comes to shopping around for better deals or looking to take action to improve their finances.
He said: “Most of the time they are on a set income that doesn’t vary as much as they were getting in the past perhaps. So they’re starting to look at that and saying ‘okay well this is what I’m going to get paid each fortnight, or each month and I’ve got to get through on that’ and they don’t even look to try to change anything.
“Once they’ve hit retirement, people don’t feel that they can make a change or do something different. Sometimes they might just need a bit of a hand to figure out where to start, and shopping around or comparing premiums and rates, to be comfortable in the fact you’re getting the best deal, is where we will start to see the change.”
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