Household financial wellbeing has hit its highest level since 2010 according to the latest ING DIRECT Financial Wellbeing Index, with savings, traditionally an Australian weak point, recording a particularly strong bounce.

 

The key findings of the Q3 2012 Index are:

  • Households are more comfortable with their mortgage than any other aspect of personal finances. Almost one in two (47%) of those households with a mortgage are ahead with their loan.
  • Comfort with credit card debt has improved as households continue to pay down balances. Median outstanding card debt has dropped to $1,470 per household - the lowest since tracking began in Q1 2010.
  • Comfort with household income is the highest since Q2 2010.
  • Median savings across the country  is $9,735
  • 6% of households say income is insufficient to pay immediate bills – rising to 10% of low income households (less than $40,000pa).

 

Household confidence has also grown across all measures, with cautious money management and debt reduction contributing to almost nine out of ten (88%) are comfortable with credit card debt, and 93% are comfortable with their home loan.

 

Confidence is on the rise with 83% of households saying they are comfortable with income levels – up from 78% in Q2 2012. Six percent of households say  their income is not enough to meet immediate bills and debts, down from 10% in Q2.

 

For the first time since tracking began confidence in personal savings is not the lowest score across the six financial dimensions. It is now marginally higher than comfort with long term investments, which has taken over as the weak spot of household financial wellbeing. Overall, 55% of all households have no assets or investments outside of the family home – up from 47% in Q2.

 

Mr Vaughn Richtor, CEO of ING DIRECT, says, “Households are saving more and reducing debt which is leading to greater confidence.”

 

“It is a good sign that confidence is on the way up with financial wellbeing reaching a 2-year high.”