4 financial changes to prepare for in 2020
From neobanks to rate changes and insurance hikes – a number of changes are set to take place in the coming year that could have both positive and negative ramifications for the financial position of Australians.
The changes, as highlighted by Finder, come after SMSF’s sister title nestegg outlined a number of Australian policy and legislative changes that have come into effect since 1 January.
The comparison site has urged people to take note of the changes and also take account of the personal finance predictions listed below:
1. A rock-bottom cash rate
Finder is expecting the next Reserve Bank rate call – due in February – to be a cut.
Two-thirds of its expert panel is predicting the move, which would see the official cash rate plummet to just 0.50 per cent.
Weighing in on the prediction,Kate Browne, Finder’s personal finance expert, said the impact of record-low interest rates will “mean that home owners will be able to save a significant amount of money over the life of their loan”.
Noting that more than a million mortgage customers are considering switching home loan providers this year alone, she added that “it will be interesting to see which lenders pass on the rate cuts”.
2. The arrival of open banking
Finder has highlighted that open banking is “set to shake up the fintech sector this year”.
With the start date having been pushed back from February, the big four banks will now need to provide access to customer and account data for credit and debit cards, deposit accounts and transaction accounts from July 2020.
This means Aussies will be able to share their personal transaction information to score themselves a better deal, according to Finder.
3. The explosion of neobanks
Ms Browne noted neobanks as already giving Australians “a taste” of what open banking can do when it comes to their money.
“Neobanks are offering innovative apps and products, as well as features like unique spending insights and bill reminders,” she explained.
“In saying that, not all Aussies are ready to take the plunge just yet. Many people still feel more comfortable with a traditional bank or lender.”
4. Health insurance price hike
With recent debate regarding the cost-effectiveness of private health insurance in Australia seeing many customers unsure about the value of their product, it’s worth noting premiums are set to increase on 1 April by 2.92 per cent on average.
This amount will vary across funds.
Ms Browne said Australians should always be comparing across providers to ensure they get the best deal on their health insurance.
She is urging people to “compare your premium every year and switch to a fund that won’t cost more”.
“If you switch a policy with the same level of cover as your current one, you won’t need to reserve waiting periods,” she concluded.