Uncertainty erodes financial comfort
Both Gen Ys and pre-retirees are feeling less financially comfortable, according to the latest research released by industry funds-owned ME Bank.
The ME Bank Household Financial Comfort Report, released on Monday, has portrayed what it describes as a "tale of two generations" – Gen Ys (aged 18-34) and pre-retirees (aged 50-59) reporting the biggest falls in overall financial comfort (both down 10 per cent), but for very different reasons.
It said that while Gen Ys (and single parents) were more concerned about their available cash savings, at the other end of the age spectrum, pre-retirees are most concerned about their expected standard of living in retirement as well as their investments.
The report said that falling financial comfort for older generations was also linked to falls in comfort with investments (down 9 per cent on average, with the largest fall of 13 per cent for builders (aged 75+) and increased risk aversion in the current low interest environment.
It said a corollary of this was a fall in financial comfort in anticipated standards of living in retirement which was down across all households by 8 per cent to 5 out of 10, but by 16 per cent to 4.5 among pre-retirees.
However it pointed to very high levels of comfort expected by self-funded retirees (7.14 out of 10) and significantly lower comfort levels reported among those totally/partly dependent on government pensions (3.38 and 5.15 out of 10 respectively).
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