The New Year could mean good things for your wallet, especially if you plan ahead!
Spending expert Ali Cassim from financial comparison site RateCity.com.au shares five major financial developments to look out for and work to your advantage in 2014.
More mulah for expecting mums
Australian women are set to receive more paid maternity leave under the government’s proposed $22 billon Paid Parental Leave Scheme. Under the scheme, mothers earning up to $150,000 a year would be paid their full wage, including superannuation, for 26 weeks.
Under the existing scheme, paid parental leave is set at the national minimum wage of $622 a week, or around $11,000 over 18 weeks for the primary carer.
Good news for bad credit
From next year, there will be a change in the way your credit information can be shared by lenders for the purpose of assessing credit. The changes are being introduced in March, and data will be backdated to December 2012, so it’s important to be on your best repayment behaviour from now onwards!
This is great news for people with a tainted credit history, but is making changes for the better. If you have had a black mark against your name in the past, you can now work hard to rectify your credit situation and prove to the banks that you’re a good candidate for credit in the future. Effectively, you’ll be able to add ‘green ticks’ to your file, whereas in the past you may be left with an unmoving black mark and no opportunity to redeem yourself.
Oh baby, are you covered?
Aside from the obvious peace of mind that health insurance offers – protection against the unexpected such as hospital bills from illness or accidents – health insurance can actually save you money.
You can avoid the Medicare Levy Surcharge by joining any hospital cover and maintaining it for the full financial year. And if you get private health insurance before you’re 31, you can avoid Lifetime Health Cover loading on top of your premiums. If you’re considering starting a family in the next few years, it’s important to let your health insurance provider know in advance so you’re adequately covered for pregnancy-related features, such as obstetrics.
Most providers have a 12 month wait period before you can claim against pregnancy-related features in a policy.
More options to boost your super
With Australians living longer (retired men to 86 and women to 90) some people are running the risk of outliving their superannuation.
Women are the worst effected, with research showing we must work 25 years longer than men to retire with the same amount of super. The good news is there are a few ways for women to get a head start in 2014:
Take an interest in your super and watch it grow – look into the benefits of your current fund and investigate the alternative options if your fund is not likely to deliver the best results for you into retirement
Roll it into one account – the first point of call to find all your funds would be the ATO’s SuperSeeker or seek advice
Don’t ignore tax benefits – one of the most attractive features of super is the money you can make on it through your tax!
Make extra contributions – Superannuation Guarantee Contributions are currently 9.25% and increasing to 12% by 2015. You can boost your return by making additional contributions – there are advantages such as the contribution tax concessions mentioned, plus the power of compound interest can save you a lot of money over time.
Rates on the rise
With interest rates at all-time lows, it’s inevitable that rates will start to rise and while it’s too early to call when this will happen, it’s not inconceivable that this could happen next year. Australia’s major lenders have started to raise their fixed rates for home loans and we know that fixed rates typically move ahead of variable – so is this a sign of what’s to come?
If you’ve got credit – a home loan, personal loan or a credit card, then rising rates could mean you pay more interest from next year, so now is the time to do your homework and shop around for a great deal. Independent financial comparison sites like RateCity are built to protect you as consumer, by offering you completely transparent information about the varying rates available. Take advantage of these online tools to weigh up your options.
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