For many baby boomers, by the time they reached 30 years of age they had purchased their first home, started a family, were working full-time in jobs where they were likely to spend the next 10, 15 and even 25 years, which meant that superannuation and long-service leave were also being accumulated.
It was an aspect everyone hoped would continue, and if today’s generation is anything to go by then it has. However, while this generation of adults can boast more wealth and opportunity than their parents, new research by MLC says that 58 per cent of Australians believe the next generation will never own their own homes.
Mother of two, Patricia* is one of the many parents concerned about housing affordability for her children. She says house prices in the major centres, like Melbourne where one of her children lives, are so high she cannot ever see them being able to afford a house, especially.
“Interest rates are great at the moment,” she says. “but job security and the rising cost of living all contribute to the lack of house affordability.”
“It’s concerning to see so many people are worried about how their children will afford their own homes and live a comfortable lifestyle,” MLC’s chief executive Andrew Hagger told The Guardian.
He says one in five expect the family inheritance will help them pay off their mortgage or ensure their financial stability.
This is true, according to Evelyn and James*, who have been fortunate enough to provide their children with financial support so that they could get a foothold in the market.
“We tell our children that property is the best thing to do,” she says. “However, the next generation has to consider that their first home might not be the ‘family home’, it might not be in the suburb they desire the most, and the property might require a bit of renovation.”
Another concern from the research is that 56 per cent of Australians are concerned they won’t be able to maintain their lifestyle in 10 years’ time.
However, while just under half (43 per cent) of Australians will rely on the Age Pension in retirement 27 per cent of those surveyed are receiving financial advice so that they won’t have to rely on the pension.
Hagger says this reflects positively on Australia’s superannuation system because it increases society’s self-sufficiency.
“That is why it is more critical than ever the objectives of super are enshrined in law as swiftly as possible to avoid constant political tinkering and provide stability and certainly to all Australians,” Hagger says.
*Names have been changed to protect family relationships.
Do you worry about the generations to come? What are your financial priorities?