GENERATION EXPENSIVE DEEMED FINANCIALLY UNFIT
21 July 2015, Written by Paris Faint
RELYING heavily on debt, failing to accumulate savings and being forced to buy into high-cost housing comparative to income, it's no wonder Australians in the prime of their working lives are finding it tough.
The Financial Fitness at Tax Time Report compiled by Bankwest has revealed that approximately 35 per cent of Gen-X Australians are financially unfit; currently rendering them the most economically distressed age group of all.
Bankwest General Manager of Retail Andrew Whitechurch says these findings are a cause for concern, especially considering the state of the market itself is primarily to blame for the struggle.
"Whilst there are some social and lifestyle factors, largely the degree of financial unfitness of Gen X-ers is driven by market and economic conditions, rather than their own doing," says Whitechurch.
Compared to their highly fiscal predecessors, Gen-X fights with buying into the property market and fails to keep their costs down in the process.
"Part of the problem for Gen X is that they are at a stage of life where they have the highest outgoing costs, such as mortgages and school fees, but many will not have enjoyed the asset price increases that Baby Boomers and Pre-Boomers had through property investment," says Whitechurch.
"Those who are starting from scratch find themselves needing to save a very substantial deposit to take on significant borrowings just to own a home, let alone to invest and set themselves up for retirement."
Large capital growth has become a thing of the past, affecting every age group that follows their parents into the market expecting a similar fair go on low pricing.
It comes as no surprise that Gen-Y are also feeling the pinch with more than 30 per cent deemed to be financially unfit, taking into consideration savings, insurance policies, housing costs and asset levels relative to debt and income.
While the report showed some improvement for both Gen-X and Gen-Y compared to surveys previous, a large portion of these age groups are still a far cry from the effortless retirement all people seek.
"It is obviously ideal if older Australians are in a position to be able to support themselves through a happy and comfortable retirement, with less reliance on the social security system," says Whitechurch.
Author: Paris Faint