Newspaper article The Northern Star (Lismore, Australia)

Government Is Changing the Rules on First Home Saver Accounts

Newspaper article The Northern Star (Lismore, Australia)

Government Is Changing the Rules on First Home Saver Accounts

Article excerpt

FIRST Home Saver Accounts Scheme (FHSA) products were wonderful ones for people saving for their first home. Launched with fanfare by the Rudd government on October 1, 2008, the initial expectation was a take-up by over 750,000 first- time buyers, with a total cost to the government of $6.5billion.

The figures were way out -- only 46,000 accounts were opened in total, and just 800 in the last six months.

Factors that contributed to the lack of enthusiasm for the accounts include the perceived four-year lack of access, and general inertia by young people, who are usually far more focused on the latest release from Apple than on their finances.

The low take-up rate is further proof that the financial literacy of young Australians leaves much to be desired. The features offered by the accounts were almost too good to be true.

It was a no-brainer for first home buyers. The government was prepared to contribute 17% on the first $6000 of funds deposited each year until the balance reached $90,000. …

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