Budget Direct Home insurance has commissioned research into the financial health of Aussies, and the results turned up some distressing food for thought.
An alarming percentage of Australians have minimal financial safety nets in place and would be at risk of severe financial stress if they encountered problems that affected their ability to work or their pay.
This survey was conducted by Google Surveys in September 2019. The sample comprises 1,000 Australians aged 18 plus and distributed throughout Australia.
The Budget Direct Research revealed:
Q1. How would you deal with a major unexpected expense, such as $1,000 for an emergency room visit or car repair?
- Less than half of surveyed Australian’s (45.4%) could cover an unexpected $1,000 emergency expense with their savings. This suggests they have little to no savings set aside, and an emergency expense of $1,000 would force more than one third of those Australian’s into unexpected debt.
- 19.1% of respondents would reduce spending on non-essential items.
- 15.7% of respondents would borrow from family or friends.
- 12.6% of respondents would finance the cost with a credit card & pay it off.
- 7.1% of respondents would take out a personal loan.
- Older Australians (65+) are the most likely to be prepared for a major unexpected expense with 51.5% of respondents stating they would pay the cost from a savings account.
Q2. How long could you cover living expenses if you suddenly lost your job and the associated income?
- More than half of respondents (55.5%) could only cover living expenses for up to 3 months. 18.7% of those respondents would only be able to cover living expenses for less than 2 weeks.
- 31% of respondents could cover living expenses for longer than 6 months.
- Again, older Australians are the most likely to be prepared for this scenario with more than half of those respondents (52%) being able to cover living expenses for longer than 6 months.
- Younger Australians would be the most likely to struggle financially, with 47.6% of respondents aged 18-24 admitting they would only be able to cover living expenses for up to 1 month.
- Male respondents could bear losing their associated income longer than females, with 36.3% of males being able to cover living expenses longer than 6 months, opposed to 25.6% of females.
Q3. Have you struggled to pay for any of the following in the last 12 months?
- Almost 1 in 3 Australians surveyed have struggled to pay for the essentials, being such as food, housing, utilities or health care in the last 12 months (30.2%).
- Australians aged 18-24 were most likely to struggle to pay the costs of food, utilities and housing in the last 12 months, with 44.1% of respondents in that age bracket admitting to having struggled to pay those costs.
- The younger the respondent was, the more likely they were to say they had struggled financially in the past year, while the older the respondent was, the less likely they were to report they struggled to pay for everyday costs.
- 10% of Australians surveyed have struggled to pay the costs of health/medical care in the last 12 months.
- More than half of Australians surveyed who own a credit card also struggle to pay these essential costs.
Q4. Which of the following best describes your situation: If my employer had to delay my usual pay cycle by 2 days with no notice I would…
- 43.1% of Australians surveyed would struggle financially if their pay was delayed by 2 days.
- 18-24 year-olds were the most likely to borrow money with 19.3% admitting they would do so in this situation.
- Older Australians (65+) were the most likely to be left under severe financial stress & hardship if their pay was delayed (20%).
Q5. Which of the following best describes your credit card situation?
- 48% of respondents who own credit cards do not pay off their closing balance every month.
- 18-24 year-olds were the most likely not to own a credit card, with 55.7% of respondents saying they don’t own one.
- 35-44 year-olds were the most likely to have the highest credit card debt, with 22.1% of respondents saying the have more than $5,000 overdue in credit card debt.
- Males were significantly more likely to own a credit card, with 66.4% of male respondents owning one, opposed to 56.6% of female respondents who own a credit card.
- Males were also more likely to have large amounts of credit card debt, with 16.2% of respondents. admitting to having more than $5,000 overdue in credit card debt, opposed to 11.8% of female respondents.
This survey was conducted by Google Survey in September 2019. The sample comprises 1,000 Aussies aged 18 plus and distributed throughout Australia. This research was commissioned by https://www.budgetdirect.com.au/home-contents-insurance.html
Budget Direct was established as an insurance provider in Australia in 2000. It is part of the international BHL group of companies headquartered in the British Isles. The group provides more than 8 million policies to insurance customers and administers $AUD 3 billion in premiums annually. Budget Direct offers Motor, Home & Contents and Travel Insurance as well as Roadside Assistance.
Budget Direct is a multi-award-winning insurer having won Money magazines Insurer of the Year 2019 for the third year in a row and Canstar’s Outstanding Value Car Insurance 2019 for 13 years in a row amongst many other awards. Our policies are underwritten by Auto & General Insurance Company Limited, an Australian insurance company regulated by APRA and a member of the Insurance Council of Australia.
Auto & General has specialised in the sale, management and underwriting of insurance products in Australia since 2000. Our insurance products include car, home and contents and travel. We provide insurance for a number of brands including Budget Direct, 1st for Women, Ozicare, Australia Post, Virgin Money, and ING. We have contact centres based in Queensland and claims assessing centres in Brisbane, Sydney, and Melbourne, in total employing in excess of 1500 people. Our commitment to providing exceptional service has seen the company win multiple industry awards.