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Media Release - 26 11 2012

Lack of Planning Costs Australians their Financial Future - Citibank releases findings of the Citi Fin-Q Survey

  • Annual Citi Fin-Q survey results reveal that Australians continue to remain more pessimistic about their financial future than the majority of their Asia Pacific counterparts.
  • 30% of Australians say their savings would last no more than one month.

26 November 2012: A lack of financial planning could be costing Australians the comfortable life they desire, according to the Citi Fin-Q survey. The survey also found that electricity prices have jumped well ahead of groceries and petrol as an area of concern and Australians remain one of the most financially pessimistic people in the Asia Pacific region.

David Mouillé, Head of Retail Banking at Citibank, said; "It's concerning that many Australians continue to live on month-to-month income, particularly when they are acutely aware of their increasing cost of living and seek a secure financial future for themselves and their families.

"Ongoing market volatility combined with global economic uncertainty is a source of anxiety for many people. They should speak to a qualified financial services professional to create a financial plan and provide peace of mind", said Mr Mouillé.

Now in its sixth year, the Citi Fin-Q survey is designed to measure the financial well-being of consumers in Australia and across the Asia Pacific region in terms of their preparedness to respond to short, medium and long-term financial challenges.

Lack of Financial Planning

While 29 per cent of Australians are financially motivated primarily by a desire to live a comfortable life (up 7 per cent from 2009), the Citi Fin-Q results indicate that they are not necessarily undertaking the steps to make these goals achievable.

The survey shows us that;

  • 78 per cent do not have a formal financial plan in place.
  • 65 per cent don't make it a habit of saving at least some of every pay.
  • 23 per cent make and stick to a budget on a monthly basis.

Notably, 30 per cent of Australians say their savings would last no more than one month in the event of a job loss.

Cost of Electricity/Gas a concern

Asked where inflation has had the most negative impact on their wallets, 43 per cent (up 38 per cent since 2009) identified increased electricity, heating and gas costs, well ahead of other consumer commodities such as groceries (22 per cent, down 14 per cent since 2006) and petrol (17 per cent, down 19 per cent since 2009).

Australians register second lowest Citi Fin-Q score in the region

One-in-three (32 per cent) of Australians say they are worried about their financial futures - making us one of the most financially pessimistic countries in the Asia Pacific region.

The total Citi Fin-Q score for Australians fell 1.4 points over the past year to 48.5 out of 100 points. This was the second lowest score recorded across the seven countries participating in the Asia-Pacific research where the total average score declined by 1.3 to 53.2 points. It was however the second highest score posted since the launch of the survey back in 2007.

Other significant results from the survey include;

  • 33 per cent of Australians say they are "somewhat better/much better off" now than they were one year ago.
  • 39 per cent are "not confident" that their retirement savings will enable them to meet all of your financial commitments and lead a comfortable life throughout retirement?
  • 44 per cent of Australians report having either "no idea how much they would need to retire" or "not started planning for retirement".
  • 57 per cent pay off their outstanding credit card balance in the average month.
  • 41 per cent believe they have enough insurance to protect both them and their families but another 42 per cent report not having any insurance at all.

Positively, Australians continue to be generally happy with 81 per cent of respondents (up 2 per cent) saying they are "positive/very positive" about their current quality of life.

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Media Contact:

Luke Thomas Tel: +61 2 8225 1631 Email: Luke.Thomas@citi.com

About the Citi-Fin-Q Survey

The Citi Fin-Q Survey is designed to measure the Financial Quotient (Fin-Q Score) or financial well-being of consumers. As part of this survey, Citi scored respondents on 14 different questions closely related to financial well-being with a maximum possible score of 100.

The Citi Fin-Q Survey was conducted by Big Picture Qual and Quant Research and involved 3500 online interviews across 7 countries. In October 2012, 500 interviews were conducted in each of the following countries: Australia, India, Indonesia, Korea, Philippines, Singapore and Taiwan. At the country level, the results are said to be accurate to within +/-4.5%, at the 95% confidence level.

Citi:

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

In Australia, Citi serves over 1 million customer accounts and 900 corporate accounts. It has the most comprehensive offering and largest global reach of any bank with operations in Australia.

Additional information may be found at citigroup.com, citi.com or citibank.com.au; or on Twitter@citi or @citibank, on Facebook at /citi or /citibankaustralia, on linkedin.com/company/citi, on youtube.com/citi and at out blog http://new.citi.com.