Inaction over rotten nest egg deals

FAITHFUL LOT

CREDIT CARDS:

61 per cent of customers have had the same card for five years.

Two in five Australians are with the bank their parents set them up on.

SAVINGS:

AUSTRALIANS are making poor financial choices when it comes to their nest eggs, home loans, health and credit, despite knowing that better options are available, new research has revealed.

The Financial Consciousness Index – launched by Deloitte Access Economics and comparethemarket.com.au – canvassed 3000 people on their financial understanding and found 50 per cent believed they could be on a better wicket for superannuation, mortgage, health insurance and credit cards. This was despite close to a third being aware there were better deals available and 22 per cent admitting they’d never compared financial products.

Comparethemarket.com.au spokesman Rod Attrill said people can often feel bombarded by complex information.

“At least half of our adult population is making poor choices across their most relied-on financial products,” Mr Attrill said. “This could be because we are overloaded with too much information and aren’t taking the time to understand and compare our product options.”

But respondents did acknowledge they were accountable for their own situations, with 58 per cent saying a budget or financial plan was the most important factor for meeting financial obligations, while 42 per cent rated investment and savings choices as crucial. Another third believed they should improve their financial understanding.

Those earning below $70,000 a year were the worst affected, with 55 per cent lacking confidence in their superannuation product; 61 per cent believing their choice of mortgage had cost them considerable money; and 53 per cent aware they should be on a better credit card deal.

“A good idea is to review household finances at least every 12 months, to make sure we are always getting the best deal,” Mr Attrill said.

Using comparison sites, online educational tools and Federal Government Jake Tasker discovered he had permanent disability insurance when in hospital after becoming a quadriplegic.

SURPRISE:

information sources, such as ASIC’s Moneysmart website, can help empower consumers, according to lender ME’s spokesman, Matthew Read.

“Independent comparison sites can help you shop around,” Mr Read said. “You can often get a better deal just by telling your existing provider what else is available. Unfortunately, loyalty is often exploited rather than rewarded, so be prepared to shift your business, as that’s your best negotiating tool.”

Switching financial products or providers can make significant savings, but many Aussies “set and forget” insurance, credit card and loan products, which can prove costly, said Finder.com.au spokeswoman Kate Browne.