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1 in 3 Queenslanders classed as financially vulnerable

5 min read
19 Oct 2018

19th October 2018

A new study[1] measuring ‘financial consciousness’ saw the average Queenslander just scrape a pass, scoring a mediocre 50.6 out of 100.

Worryingly, there is a direct relationship with low scores and poor financial wellbeing overall, with 32 per cent of Queenslanders found to be financially vulnerable, which are those who underperformed in the study’s combined financial wellness and financial consciousness components. This implies nearly 1.3 million[2] people across the state feel little job security, regularly struggle to pay household bills and are unable to put savings aside.

Alongside South Australia and Tasmania, Queensland is the state with the highest proportion of financially vulnerable residents.

Comparethemarket.com.au General Manager of Banking, Rod Attrill said: “Queensland, along with Western Australia, has the highest unemployment rate in the nation, having risen to 6.4* per cent in August. Wages are flat, growing just 2.2 per cent over the last year, and business confidence has stagnated. This widespread uncertainty is undoubtedly impacting Queenslanders’ financial confidence and having a knock-on effect on people’s own belief in their ability to improve their future financial situation.”

The Financial Consciousness Index (FCI), which was commissioned by comparethemarket.com.au and developed by Deloitte Access Economics, tested 3,000 individuals nationally to uncover their ability, willingness and sophistication to make a change to improve their financial wellbeing.

Results were weighted for a score out of 100, placing them into one of five groupings associated with different levels of financial consciousness. Scoring less than 35 placed respondents in the lowest category: ‘Don’t know what they don’t know’, whereas scoring between 35 and 45 saw them in ‘It’s a blur’. The average Aussie is deemed ‘Conscious’ by scoring between 45 and 55. Those ‘Rising up the ranks’ scored between 55 and 70, and the ‘Financially Enlightened’ scored over 70 points.

“Determining a person’s ‘financial consciousness’ can help form decision makers’ views on how to tackle much broader public policy problems. If people do not feel empowered or able to improve their financial situation, then this has obvious effects on the economic health of Queensland as a whole.”

Major contributing factors that affected a person’s FCI score include their age, income, gender, location, education, and whether or not they own their own home.

On average, Queensland women scored 48.6, whereas men scored 52.6, reflecting a range of inherent social factors such as women being less likely to be in full-time work, and therefore more likely to have lower superannuation balances.

Across the country, ACT residents – who enjoy the highest average income and one of the lowest unemployment rates – demonstrated the highest average FCI score of 52.5 out of 100. South Australia and Tasmania were in joint last place, scoring an average of 49.9.

“There is a clear relationship between people’s FCI score and their overall financial wellbeing and sentiment. Nearly two-thirds (64 per cent) of Queenslanders said they have struggled to pay their household bills at some point. There is also ongoing concern about holding down a job, with 39 per cent of respondents saying they either worry or feel very little job security. Also looking back, 32 per cent of Queenslanders said they are now less confident in their ability to retire comfortably at 65 compared to this time last year.

“By commissioning this report, we hope to capture the attention of a range of stakeholders, including consumers, businesses, and public policy makers. Undoubtedly, we feel it demonstrates that many Queenslanders need greater education, empowerment and understanding to enable them to take tighter control of their everyday finances,” said Rod.

 

Jess – Pimpama, QLD
30-year-old stay at home mum Jess is unable to meet many of her financial goals as she puts most her money towards rent, water and electricity bills, fuel, grocery shopping and daycare. Married with two kids, Jess doesn’t have a home loan and isn’t in the workforce. She checks her savings account every day and believes she is getting the best deal on her car insurance policy in particular. When it comes to retirement, Jess thinks she will be able to retired comfortably at 65 as she has savings set aside and makes regular contributions to her superannuation account.

Kylie – Townsville, QLD
Kylie is 37 years old, married and trying to save for a home loan deposit. She currently feels she has job security at an organisation she’s worked at for over seven years however she has found herself in financial difficulty after unexpectedly losing a previous position after being made redundant, which left her struggling to make ends meet for five weeks with no income. Her future financial outlook is unclear, she doesn’t believe she will be able to retire comfortably at 65 due to the rising cost of living, her limited contributions to her superannuation, and lack of savings that delays retirement and purchasing a home.

 

For interviews with Rod and more information, please contact:

Hannah Twiggs | 07 3377 8879 | 0431 511 362 | [email protected]  

About comparethemarket.com.au

* Seasonally adjusted

Comparethemarket.com.au is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, travel and personal finance products from a wide range of providers. Our easy-to-use comparison tool enables consumers to find products that best suit their needs and back pocket.

[1] The Financial Consciousness Index (FCI), which was commissioned by comparethemarket.com.au and developed by Deloitte Access Economics, tested 3,000 individuals’ belief in their ability to influence their financial outcomes, as well as their willingness and sophistication to make a change to improve their financial wellbeing.

[2] This figure represents 32% of the estimated QLD resident population over the age of 15 as at December 2017, ABS

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Written by Hannah Twiggs

Hannah (or Twiggs as she's known by most of her colleagues) is a non-stop talker, avid snack eater, dog lover and passionate writer. When she's not chatting to journalists or writing up new story angles, Hannah enjoys a good Netflix binge, going away camping with friends and big brunches - preferably with extra bacon.

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