Financial comfort level reaches record high

Improvements in job availability and security were key contributors to household financial comfort reaching its highest level ever, according to a report by ME Bank.

In the six months to December 2014, ME Bank’s Household Financial Comfort Index rose 8 per cent to 5.78 out of 10 – the highest level reached in the index’s three-year history.

One of the major contributors to the overall rise was a 22-point net improvement in job availability. Those who said it would be easy getting a job within two months if they were unemployed rose from 36 per cent to 48 per cent, and those who said it would be difficult fell 10 points to 47 per cent.

A 12-point net improvement in job security was another key contributor to the overall rise in financial comfort. The proportion who felt secure in their job rose 6 points to 72 per cent, while those who felt insecure fell 6 points to 26 per cent.

The report found that further growth in asset values also contributed to the record-high confidence level, with comfort around investments and the ability to maintain lifestyle in retirement up 10 per cent and 12 per cent respectively.

ME Bank consulting economist and report co-author Jeff Oughton said the financial psychology of Australian households has changed dramatically for the better.

“Back in June 2014, overall household financial comfort had fallen 3 per cent to 5.33 out of 10,” he said.

Mr Oughton also said this was “the first time in the survey’s history that more people have reported it would be easy getting a job within two months if unemployed than those reporting it would be difficult”.

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