Why we’ve lost confidence about our finances

INFORMATION overload and the banking royal commission fallout have caused rising numbers of Australians to lose confidence in their ability to choose financial products.

New research has found more than 50 per cent of home loan and credit card customers are not confident they’re on the best deal.

And almost half of health insurance fund and superannuation fund members feel the same way, according to the Deloitte Access Economics research commissioned by comparethemarket.com.au.

It found the proportion of consumers lacking confidence had increased across all product areas in the past year, and less than half review their products each year.

Comparethemarket.com.au general manager of banking Rod Attrill said the most daunting areas causing confusion were credit cards, home loans, energy bills and health insurance.

“For home loans there’s probably 50-plus lenders in Australia and each has five, six, seven or more home loans,” he said.

The research found 22 per cent of mortgage customers had never checked their interest rate.

“Those one in five are probably not getting the best deal,” Mr Attrill said.

He said tighter lending conditions had also impacted consumers.

Mr Attrill said while there was negativity flowing from the financial services royal commission, “there are also lots of people doing the right thing”.

MBA Financial Strategists director Darren James said the royal commission had put previously trusted financial institutions “in the news for the wrong reasons” and that had dented confidence.

Even if the bad news didn’t apply to them, people were confused about whether it impacted their financial choices, he said.

Mr James said there had been a huge jump in financial products in the past decade as consumers became more savvy and were able to research products online.

“Providers are always trying to come up with an angle or added benefit that separates them from the marketplace, and that means we have endless variety in terms of what’s available,” he said.

Mr Attrill said when people were notified of a change to their home loan interest rate, they should take time to check it. “Use that as a trigger to jump in and compare,” he said.

“I think you will see more and more people going to mortgage brokers now the industry’s had a bit of a shakeup.”