Young Australians are worried about making poor financial decisions
More than half of young Australians don't understand superannuation or how to fill out a tax return.
Almost three quarters (71%) of young Australians aged between 15 and 20 years old worry they are making bad financial decisions, according to the Westpac 2018 Financial Literacy Study. The survey also revealed 75% of parents are concerned their child isn't equipped with the right financial knowledge to tackle everyday, real-world money dilemmas. And according to some of the report findings, they have every right to be concerned.
More than half (59%) of the young Australians surveyed said they did not feel prepared or confident to fill out a tax return. Plus, 53% said they didn't understand superannuation and 63% said they didn't feel confident in their ability to apply for a loan. Considering tax is an unavoidable reality that comes around every year, and superannuation is likely the biggest asset any one Australian will have when they retire, these results are worrying.
In fact just last week the Productivity Commission admitted the superannuation system was an "unlucky lottery" for many Australians in its report into superannuation. The report found young Australians have the most to gain from understanding the superannuation system (and in turn, the most to lose), revealing that being in a top-performing default fund as opposed to a poor-performing fund with high fees would save Australians just entering the workforce this year a huge $407,000 by retirement. This is why it's proposing the implementation of a top-performing "best in show" list of balanced super funds be given to all young Australians when they enter the workforce, to aid their choice.
It's not young Australians who are to blame for this lack of know-how; superannuation and tax are notoriously complex areas of personal finance, and are not part of the standard school curriculum (but hey, at least kids understand how to use long division and count to 10 in Japanese... ). And it's not through lack of trying, either. Westpac's research found 81% of young Australians are keen to learn how to manage their finances in the real world, and 96% are actively looking for financial information, advice and support.
With this in mind, Westpac has partnered with online platform for school leavers, Year13, to launch FinLit; a free, online financial literacy program for young Australians to access after they graduate. The platform will offer interactive, educational content on topics such as moving out of home and getting your first job.
Westpac’s head of segments, youth, millennial and women Felicity Duffy said, "It’s important that we give young Australians access to trusted and reliable resources to help them understand future expenses and information on how they could save their money effectively. As a parent, I know what it is like to worry about sending your kids out into the world, but we hope our ‘FinLit’ program will alleviate some of this anxiety, as we empower kids with the financial tools they need."
If you're a young Australian wanting to brush up on your personal finance knowledge, you can check out the new platform FinLit here.