Affluent Australians more optimistic this year, but their intentions to spend stand still
New research from Visa reveals how Australia’s wealthy are managing their discretionary income
Sydney - Australia’s wealthy are feeling more optimistic about the economy and employment opportunities compared to a year ago, but few (32%) intend to increase their discretionary spending over the next 12 months, according to regional research released today by Visa.
The 2014 Visa Affluent Study (the “Study”) also reveals affluent Australians’ spending habits continue to favour experiences over luxury goods, but groceries and utilities are taking up a greater proportion of their expenditure compared to most of the other countries surveyed.
Optimistic but still reserved
This year’s study shows Australians have grown more upbeat in the last 12 months, with 50 per cent having a positive outlook on their economic situation and around a third feeling optimistic about employment opportunities. But there is no intention to increase their discretionary spending.
“The study shows that affluent Australians feel positive about broad economic factors, but aren’t confident this will translate into increased income, savings or spending on non-essential items. Just over half of those surveyed (55%) expect inflation to increase this year, which could be contributing to their reservations,” said Stephen Karpin, Group Country Manager for Visa in Australia, New Zealand and South Pacific.
How Australians are spending
Affluent Australians spend around 60 per cent of their monthly household income, with eight in ten people setting aside a budget for their discretionary spend.
Three quarters (75%) of wealthy Australians donated to charitable organisations in the past year, the second highest in the APAC region, behind Indonesia.
Relative to the other countries surveyed, Australia has one of the largest proportional spends on groceries (25%) and utilities (17%). When it comes to the remaining monthly spend, experiences take precedence over luxury goods, with evenings out (90%), and family holidays (77%) topping the list. Nearly one third (29%) of those who spent on family holidays say they plan to increase their spending in the next 12 months.
When buying luxury goods, the study shows handbags, watches, shoes and clothes are more likely than other categories to be bought internationally.
It’s also clear that cards are favoured over cash.
“The study shows that credit and debit cards remain the preferred payment methods for affluent Australians, accounting for nearly 70 per cent of their expenditure compared to 18 per cent cash,” said Karpin.
For the purposes of this study, affluent was defined as a household income of $150,000 or greater.
Visa is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world’s most advanced processing networks — VisaNet — that is capable of handling more than 47,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information visit www.visa.com.au and @VisaNewsAU.
About the Affluent Study 2014
The Study was conducted between September 2013 and December 2013 by TNS Singapore on behalf of Visa. Male and female credit card holders between the ages of 18-55 and in the top 20 per cent of each country’s income distribution range were surveyed. In each of the 11 markets, except for the UAE and New Zealand, 500 interviews were conducted online with representative quotas of gender, age and income. The study surveyed 5,169 affluent consumers in countries including Australia, China, Hong Kong, India, Indonesia, Japan, New Zealand South Korea, Russia, Singapore and the United Arab Emirates.
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