Get your share of $10bn

Clark Morgan, vice chairman & head of strategy and development, Crestone Wealth Management

More than a third of Australians (35%) struggle with money management and 41% of us are not prepared to handle a large, unexpected expense, says the Commonwealth Bank.

But there’s at least $10 billion in free money that we’re not accessing, and it could go a long way to help solve our financial worries.

CBA estimates Aussies are missing out on more than $10 billion in unclaimed benefits, rebates and concessions every year. It might include any one of 250 potential benefits, including green slip refunds, energy rebates, toll relief, carer allowances and help with children’s activities.

To help people claim this money, CBA has launched Benefits finder, a new feature in the CommBank app.

“Whether it’s claiming a car registration rebate or money off a utility bill, Benefits finder uses data capability and machine learning to put potential entitlements in front of customers at the right time, and then nudges them to start a claim,” says Pete Steel, CBA’s chief digital officer.

A 2019 KPMG report looking at the future of digital banking says 90% of Australians want their bank to provide information about spending and saving.

CBA has been working with Harvard University’s Sustainability, Transparency, Accountability Research (STAR) Lab to better understand how to help customers manage their money.

Professor Michael Hiscox and his team at STAR Lab have been assessing the impact of CBA’s Benefits finder for customers, examining how it can provide better results.

“Past research has shown that individuals who qualify for benefits often do not receive them because they are unaware they are eligible or because the processes for accessing benefits are complicated and time-consuming,” he says.

Three in five future first home buyers plan to purchase with a deposit of less than 20%, reveal figures from the Genworth Group.

The mortgage insurer says an 8.4% decline in median house prices across Australia since 2017 is providing prospective first home buyers with an opportunity to get a foothold in the property market.

It’s competitive, however. Almost half (47.4%) of recent first home buyers who paid a deposit of less than 20% are keen to buy again.

In June and July this year, Genworth surveyed 2001 prospective first home buyers and 1008 recent first home buyers. Georgette Nicholas, its chief executive and managing director, says as first home buyer needs evolve it is important that stakeholders work together to develop solutions that support the Australian dream of home ownership.

This great dream, however, is changing in its nature.

In Sydney, more than a third (36.3%) of future first home buyers plan to buy a small apartment as their first property and trade up within five years. For Melbourne, the figure stands at 24.9%.

To bridge the deposit gap, 75.1% of first home buyers intend to apply for the federal government’s First Home Loan Deposit Scheme, 27.5% will ask their parents or family for assistance and 15.8% plan to use lenders mortgage insurance (LMI).

It’s consistent with recent first home buyers, as 70% reported they did not fund 100% of their deposit from their own savings. The majority (56.9%) of them relied on parental or family assistance (via gifts, guarantees and loans). LMI was also a popular option, with (35.6%) using it to secure a loan with a deposit of less than 20%.

HOME TRUTHS

• One in six potential first home buyers plans to buy an investment property as their first home.

• One in four Sydney-based first home buyers looking at an investment property would use rental income to service the loan.

Younger, wealthy Australians demonstrate higher levels of confidence about future investment conditions than their older counterparts, according to Crestone’s 2019 State of Wealth Report. It surveyed 1000 high net worth and ultra-high net worth Australians (defined as those with over $1 million and over $10 million in investible assets respectively).

What we discovered is that gen Y respondents (37 and younger) were significantly more confident on the outlook for the Australian economy, with 55.7% thinking that 2019 would be somewhat or much better, compared with less than a quarter of gen X (38–52) and only a fifth of baby boomers (53–72) .

Similarly, over half of gen Ys surveyed believed the global economy would perform much or somewhat better throughout 2019, compared with less than a quarter of both gen X and baby boomers. This positivity is also mirrored in their attitudes to investment markets.

What is driving the difference between the generations among Australia’s wealthy? Attitude and awareness. The confident attitude of the gen Y cohort (which believed that almost every asset class would outperform and was significantly more likely to invest more throughout 2019) also seems to derive from their familiarity with underlying asset classes. For example, over 40% of gen-Yers surveyed cited their familiarity with international markets as a reason to invest internationally, compared with just over 5% of baby boomers.

What might affect gen Y’s confidence about global investing? Costs. A key issue putting them off greater international investment was perceived costs – an overwhelming eight out of 10 of gen-Yers surveyed indicated they would invest more internationally if they could access offshore investments cheaply (compared with less than two-thirds of gen X and less than half of baby boomers).