Australian blame wages for struggling to keep up with bills
Australians are increasingly feeling the financial pinch and as a result are ditching vital insurance bills just to keep up with the cost of living.
National
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Australians say they are increasingly struggling to pay their bills because wages are not keeping up with living costs.
Millions of people are feeling the financial pinch, a report estimates, with those under strain largely blaming higher expenses such as food and power, not enough earnings, and slow wages growth.
More households are also dropping health, home, car and travel insurance as money becomes tight, it appears.
The Deloitte Access Economics research suggests about 7.5 million adults — almost two million more than last year — on average regularly struggle to pay bills, don’t save money regularly, don’t feel they have job security, and would feel financial pressure if they fell out of work.
The Financial Consciousness Index, commissioned by comparethemarket.com.au, notes that although inflation is low, household disposable income growth is even lower.
Sentiment about being able to cope with unexpected job and income loss had declined in the past year.
Relying on welfare was the key contingency to survive a financial crisis.
The index tested 3000 individuals on various factors including ‘financial wellness’.
The analysis was done before the most recent round of income tax cuts.
Two in five respondents (42 per cent) conceded that at some point they struggled to pay bills, including essentials such as utilities, rent or mortgage payments.
One in seven (14 per cent) admitted they struggled most or all of the time.
More than a third (37 per cent) said they’d need government support or benefits in the case of financial emergency.
Just one in five felt confident they could raise $1000 within a week.
And only one in five believed they could comfortably retire at the age of 65.
Comparethemarket.com.au banking expert Rod Attrill said: “It’s clear that personal financial circumstances have worsened for a significant number of Australians …
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“With just 32 per cent admitting they have emergency funds set aside to enable them to survive a sudden and unexpected financial loss, many feel there is little they can currently do to improve their ability to pay bills and build a financial safety net.
“It’s an even greater concern that the number one plan for Aussies struggling to keep their head above water when it comes to money matters is to rely on government support and benefits.
“Alongside the current push for increases to the Newstart allowance, this should signal a big red flag for the federal government if the economy weakens substantially.”
Originally published as Australian blame wages for struggling to keep up with bills