Financial Confidence Is Down Among Australians

Latest Suncorp Life Confidence Index reveals Australians' knowledge of financial services, including life insurance, has remained at a consistent level during the five months ending August, 2010.

Across all states in Australia, 44% of those surveyed said they were comfortable with their financial knowledge that included life insurance, superannuation and use of a financial adviser.

In general Australian men have greater financial confidence than Australian women. The survey found that men are more commonly using
the services of a financial advisor (57% compared to 43% of women) and men are more likely to be covered by life insurance (50% compared to 39% of women).

Financial Confidence has dropped

According to the study, the six attributes affecting consumers' financial confidence are:

  1. Being able to manage anticipated increases in the cost of living
  2. Having a savings buffer to cover periods where the main breadwinner is not earning income
  3. Financial know-how
  4. Feeling that they have financial control
  5. Believing they have enough superannuation to fund retirement
  6. Their debt to income ratio.

Overall, Australians' confidence about their financial wellbeing has fallen since the last survey in April. Life Confidence Index has dropped 1.5 per cent from 60.9% in April to 59.4% in August.

Confidence took the biggest hit in Western Australia, dropping 2.8 points over the survey period, while Queenslanders were the least confident of all Australians, with an index rating of 58.1 per cent in August - down 1.4 per cent since April.

This could be attributed to the May announcement by the Rudd Government of the Resources Super Profits Tax (the mining super tax) and the subsequent announcement of a Federal Election.

Suncorp Life CEO Geoff Summerhayes says the results reveal the confidence levels of young families, blue-collar workers, single males and females and empty nesters are "on shaky ground".

"The factor that had the single biggest influence on financial confidence was that one in four Australians are worried that they will not be able to manage the increasing costs of living," he said.

Reasons to feel confident

However Mr Summerhayes believes that Australians are very good at coping with adversity. And there are many reasons to feel confident:

  • The employment market is picking up
  • We have a stable economy
  • Our banking system is strong

Just sometimes you need a little help to feel you are on track in terms of finances. That's where seeing a professional financial adviser can help.

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Published on September 9-th, 2010 in Life Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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