Gen X shortchanged by financial initiatives
There has been a lack of initiatives aimed at Generation X, leaving them feeling “left out” of recent financial regulation.
Gen X, those born between 1965- 1980, often faced the dual pressure of caring for ageing parents and their own younger children. However, it was disappointing there had been a lack of regulation to help those in this demographic compared to help for Baby Boomers.
Luke Marshall, senior partner at KDM Financial and Estate Planning, said: “Firstly, there is the Downsizer Contribution and Work Test that has allowed Baby Boomers to invest into their superannuation accounts reducing tax revenue and, with some good planning, increasing older Australian’s access to the Age Pension.”
“This is great news for Baby Boomers, but someone has to pick up the bill and inevitably we are finding it ends up being their children, the Gen Xers.”
He added, at the other end of the scale, measures to help younger people such as the First Home Super Saver Scheme and opt-in insurance for superannuation members under 25 could end up being funded by reducing funds available for Gen X measures.
Referencing opt-in insurance, he said: “This is a great move for younger members who need help building up their low balances. However, this will likely result in increased premiums for everyone else.
“Insurance providers need young, healthy members in their premium pool, to offset the cost of insuring older, and presumably less healthy members. This is known as risk pooling and is fundamental to the feasibility of the insurance industry.”
He suggested Gen X monitored the fees on their superannuation and investment products has more products had resulted in more competitive pricing.
“Very recently, regulatory changes and increased compliance costs, in the wake of the Hayne Royal Commission, has actually reversed this trend. Therefore, it’s important to know what you’re paying and compare your fund with the rest of the market.”
AUTHOR
Laura Dew
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