08-Feb-2016 • Corporate

Findings from ME Bank’s 2015 Saving Intentions and Behaviours Survey

  • Generation gap widening: while the financial comfort of older Australians has been rising since 2011, the financial comfort of younger generations has been relatively static, with household investments a key factor.
  • ME’s overall Household Financial Comfort Index rose 3% to 5.59 in the 6 months to December 2015, largely driven by an 8% rise in comfort with the ‘ability to cope with a financial emergency’, related in turn on improvements with job availability, job security and income security over the past six months.
  • Not all states equal: WA was the only state to record a fall in financial comfort to the lowest in Australia, due to the fading mining boom. Melbourne had the highest level of household financial comfort of any capital city.
  • Small business picks up: Self-employed people (typically, micro/small business owners) reported the largest increase in financial comfort of any working cohort, up 18% to 5.91 over the six months to December 2015.


ME’s ninth biannual Household Financial Comfort Report shows the gap in financial comfort between younger and older generations has widened significantly since the first survey in 2011.

While the comfort of ‘builders’ (aged 75+) and ‘baby boomers’ (aged 50-74) has improved by 16% to 6.38 and 14% to 5.85, respectively since October 2011, the comfort of ‘Gen Y’ (aged 18-34) and ‘Gen X’ (aged 35-49) has remained broadly unchanged over the same period, up only 2% to 5.56 and 3% to 5.16, respectively (see Report pages 9-10).


Digging deeper, the Report indicates ownership of assets including property, superannuation, shares and managed funds, is largely fuelling the divergence.

Jeff Oughton, ME’s consulting economist and report co-author, said “recent gains in the macroeconomic and financial environment including significant rises in property and equity values, has disproportionately lifted the financial comfort of older generations who tend to have higher levels of asset ownership or investments.

“The findings add to recent policy debates around housing ownership and affordability, and the generosity of superannuation tax concessions for wealthier Australians,” he said.

“They highlight the importance of housing and superannuation as important wealth generators with both contributing to higher levels of financial comfort. They suggest that wealthier Australians may be better able to manage any wind-back to super tax concessions, while remaining at a relatively high level of financial comfort.

“The disparity in financial comfort between generations is largely due to older generations enjoying substantial improvements in their investments and income primarily through real estate and superannuation. Gen X and Y have smaller investments and continue to struggle with property ownership, so have benefited to a much lesser extent.”

Oughton said younger generations are more likely to rent, reflecting the increased difficulty when it comes to getting on the property ladder. He said the issue is exacerbated for the younger generations as prices and rents have grown faster than incomes, particularly in capital cities (see Report page 11).

Other findings

Overall ME’s Household Financial Comfort Index rose 3% to 5.59 out of 10 in the 6 months to December 2015, equivalent to about 65% of Australian households reporting mid-to-high financial comfort. This result reverses half of the fall from the previous 6 months and is the second highest financial comfort result recorded since ME started the survey in late 2011 (about 3% above the historical average of 5.45) (see Report page 5).

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