Australians without a financial safety net and no government support could only survive 22 days if their income was to suddenly cease, Otivo has suggested.
The automated online financial advice service claims its new data reflects 342,477 households in Australia who have no safety net such as credit cards or other loans.
The research claims with government support, the average Australian could survive 21 weeks if their income was to cease.
Otivo also claimed that some of the 4.1 million in Australia suffering financial pressure are living in affluent suburbs such as Double Bay and Rose Bay in Sydney’s eastern suburbs.
Otivo said that as the cost of living in Australia continues to rise and on the back of the RBA lifting the cash rate from a record low 0.1 per cent to 0.35 per cent on Tuesday – its first rate hike in over a decade – now is the time for all Australians to have access to financial advice.
“The data shows that within postcodes, there is a vast difference in financial fairness. One neighbour, for example, may have a gifted financial safety net and access to a financial adviser, while another neighbour is simply living paycheck to paycheck with no guidance on how to sustain their lifestyle financially, or plan for their future,” Otivo founder and CEO, Paul Feeney, said.
“For many, and perhaps those who need it most, financial advice on complicated subjects like superannuation, insurance, investments and debt, is entirely inaccessible.
“Leaving many Australians ill-equipped to plan, save and navigate financial decisions with a robust understanding of sometimes complicated concepts.”
The findings come after the Financial Planning Association (FPA) released a report late last year that highlighted the importance financial advisers to Australians on the back of the impacts of the COVID-19 pandemic.
A survey conducted by the industry body found that while 35 per cent of the respondents’ income was affected by the lockdowns — and 34 per cent were unsure if they had enough savings to get through it — compared to this time last year, 11 per cent said they are now in a stronger financial position.
About 26 per cent of the respondents also said that they have made changes to their financial situation, including to “be more frugal” about lifestyle choices (44.7 per cent in 2021 compared to 30.8 per cent in 2020), have an increased focus on growing savings (43.9 per cent), and paying off debt (41.3 per cent in 2021 compared to 23.3 per cent in 2020).
