Almost a quarter of Australians are financially fit thanks to an increased focus on savings, according to new research.
The fifth annual Bankwest Financial Fitness Index shows that Australians have improved their situation over the past five years, with 2 per cent of the population in better financial shape (23 per cent) than in 2009 (21 per cent).
Bankwest Retail Chief Executive, Vittoria Shortt attributed the improvement to a healthy savings mentality and a resilient local economy.
The Index found that 58 per cent of Australians have changed their spending patterns over the last year, with the majority (51 per cent) becoming more conservative.
“This is a significant improvement on 2012’s figures when only 44 per cent reported more careful spending”, Ms Shortt said.
“The GFC knocked local economic confidence, driving a conservative change in spending habits as more Australians became committed to growing their savings”, she added.
Australia’s Baby Boomers are the generation in the best financial shape, with 30 per cent considered financially fit, overtaking Pre-Boomers (29 per cent) as the age group with the most financial stability.
Conversely, nearly a quarter (23 per cent) of Baby Boomers are classified as financially unfit, highlighting the growing gap between those who are comfortable in their later years and those under financial pressure.
The Bankwest Financial Fitness Index found that Australia’s Generation Y is the most careful with their money. An impressive 69 per cent of ‘Gen Yers’ have changed their savings habits in the past year, with 56 per cent becoming more conservative – this is the highest percentage of all the generations.
The research also found that women are financially fitter this year (16 per cent) compared to 2011 (11 per cent) but noticeably less so than 2012 when women’s financial fitness peaked at 19 per cent. Women continue to struggle financially, with more than one third (35 per cent) considered financially unfit, compared to just one in five men (20 per cent).
Part of Bankwest’s Financial Indicator Series, the Financial Fitness Index measures 14 vital signs, including housing costs, debt, savings, insurance and financial assets.