Most Australians not financially prepared for the future

Australians are neglecting to plan for their financial future, with more than half saying they have no financial plans in place and only one in seven having a comprehensive plan in place.

The National Mortgage Survey, commissioned by CUA, also revealed that almost two thirds of Australians aged 40-49 don't have any financial plans for the next 5-10 years, while 42 per cent haven't even thought about planning for their financial future. CUA is Australia's largest customer-owned provider of banking products and services.

CUA Head of Partnership Products Ren Mazza said the results were concerning, as they revealed Australians were potentially being complacent about their finances.

"It's alarming that so many Australians are failing to look ahead. Without a clear plan in place to manage their money and grow their assets, people are missing an opportunity to set themselves and their families up for a comfortable and secure future," he said.

"In particular, it's worrying that so many Australians in the later years of their working life – those who have only 15-20 years until they reach retirement age – haven't got financial plans in place. In fact, less than 1 in 10 people aged 40-49 said they had a comprehensive financial plan in place for their property, investments, insurance, savings and budget."

Younger people aged 25-29 were more likely to say they had had financial plans in place, including one in five who said they had a comprehensive plan in place for the next 5-10 years.

But Head of Alliance and Distribution at Bridges Financial Services Jason Kriss said very few young people had longer term investment plans in place. Instead, they tended to focus on more short-term goals and assets like a car, or supporting their family.

Bridges Financial Services has a partnership with CUA to assist its customers with financial advice.

"It is important to understand that you can never start planning for your financial future early enough," Mr Kriss said.

"A financial planner can help you create, grow and protect your assets now and into the future," he added.

Australians earning a higher income and those with a mortgage were much more likely to have financial plans in place than lower income earners and non-mortgage holders.

"When it comes to financial advice, people can be put off by the belief you need to have a lot of wealth to have a financial plan. But people with relatively modest income or assets also need to set themselves up for the future," Mr Mazza said.

In other findings:

• Three quarters of Australians with a home loan were likely, or very likely, to make extra repayments if their mortgage repayments decreased as a result of falling interest rates. Putting extra money into savings was the second most popular option, with more than half of those surveyed saying they were likely or very likely to do so.
• Only 5 per cent of those with a home loan were very likely to treat themselves to a holiday, dining out or other hobby, while one in four ruled it out entirely.
• One in seven people with a variable interest rate mortgage were planning on moving to a fixed interest rate within six months.

The CUA National Mortgage Survey is an annual consumer survey of mortgage intentions and consumer attitudes. Polling was conducted by The Leading Edge in May 2015, with 1061 Australians, aged from 25 to 49, being surveyed. Half of those surveyed currently held a mortgage.