The financial gap between younger and older generations has widened significantly since 2011, according to a recent study by an industry super fund-owned bank.

ME’s ninth biannual Household Financial Comfort Report has revealed that the financial comfort of younger generations has remained relatively static since October 2011, while that of older Australians has been rising.

The financial comfort of Builders (aged 75-plus years) and Baby Boomers (aged 50 to 74) has improved by 16 per cent and 14 per cent respectively over the period, while the financial comfort of Gen Y (aged 18 to 34) and Gen X (aged 35 to 49) has remained almost unchanged.

“The disparity in financial comfort between generations is largely due to older generations enjoying substantial improvements in their investments and income primarily through real estate and superannuation,” Jeff Oughton, ME’s consulting economist and report co-author, explained.

According to Mr Oughton, the report’s findings highlight the significance of housing and superannuation as important wealth generators as both contribute to higher levels of financial comfort.

“Gen X and Y have smaller investments and continue to struggle with property ownership, so have benefited to a much lesser extent,” he said.

Mr Oughton highlighted the trend that younger generations are more likely to rent as they face increased difficulty getting on to the property ladder.

He added that the issue is exacerbated for younger generations as house prices and rents have grown at a faster rate than incomes, particularly in the capital cities.

“The findings add to recent policy debates around housing ownership and affordability, and the generosity of superannuation tax concessions for wealthier Australians,” Mr Oughton said.

Overall, ME’s Household Financial Comfort Index rose by 3 per cent to 5.59 out of 10 in the six months to December 2015, driven by a rise of 8 per cent in comfort with the ability to cope with a financial emergency, along with improvements in job availability, job security and income security.

[Related: Mortgage over marriage for Gen Y couples?]

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