Nearly half (43%) of all Australians have experienced some form of financial stress or hardship in the June quarter, up from 42% in Q1 and 35% a year ago, and well above average (36%), amid higher inflation and rising interest rates, according to NAB’s latest insights.
In NAB’s latest publication, Dean Pearson (pictured above left), head of behavioural and industry economics, and Robert De Iure (pictured above right), associate director economics, said financial hardship levels have now risen from a survey low 29% in Q1 2022 and remained above average in all age groups and income groups.
Across the age groups, hardship was highest for Australians aged 18-29 (55%) and those aged 30-49 (50%). For those in the lower income group, hardship jumped significantly, from 51% in the previous quarter, to 60% in Q2 – around twice as high than in the higher income group (33%).
The number of women that faced hardship in Q2 surged to 50% in Q2, from 44% in Q1, but fell to 36% for men, compared to 40% in Q1. Hardship levels remained well above average levels for women, at 38%, but were only marginally higher for men, at 34%.
Across the country, trends diverged quite sharply by state but remained at above average levels in all states. In NSW/ACT, overall hardship levels fell to 39% in Q2. Similar hardship levels were reported in VIC (41%) and QLD (43%), but these climbed quite steeply in TAS (67%), SA/NT (55%), and WA (48%).
More Australians experienced financial hardship for most measures in Q2, with not having enough money for an emergency ranking first among the most common causes. It impacted an unchanged 24% of Australians, but up from 20% at the same period last year. Also more noticeably impacted by this were women (28%), people under the age of 50 (three in 10), in TAS (37%) and in the lower income group (35%).
“Around one in five Australians overall also said hardship was caused by not having enough money for food and basic necessities or being unable to pay a bill,” Pearson and De Iure said. “Noticeably more women, people under the age of 50, and in lower income groups experienced these hardships in Q2.
“Despite rising interest rates, the number of Australians unable to make mortgage repayments in Q2 was unchanged at 6% (though up from 4% at the same time last year).
“Around one in three (34%) Australians believe ‘very much’ money is a source of stress in their life (i.e. scored eight pts or higher), and one in four (26%) feel they are struggling “very much” to make ends meet.”
Findings also showed that 28% of Australians do “not at all” feel they could manage a major unexpected expense, and one in five do “not at all” feel on top of their day-to-day finances or believe they are on track to have enough money to provide for their financial needs in the future.
In SA, a massive 37% of the respondents said they “very much” believe that money is a source of stress in their life, and in the NT, 33% felt they were struggling “very much” to make ends meet. The highest proportion of people who did “not at all” believe they could manage a major unexpected expense (47%) or felt they were on top of their day-to-day finances (39%) were in TAS.
By age, 42% of the 30-49 group “very much” believed that money is a source of stress in their life. Some 31% of this age group felt they were struggling “very much” to make ends meet. In the 50-64 group, 35% did “not at all” believe they were on track to have enough money to provide for their financial needs in the future.
“Noticeably more women than men indicated they were not doing very well in all these aspects of their finances (particularly being able to manage a major unexpected expense), as were those in the lower income group (particularly being on track to have enough money to provide for their financial needs in the future, managing a major unexpected expense, feeling on top of their daily finances and struggling to make ends meet),” Pearson and De Iure said.
How are you helping your customers cope with financial stress? Use the comment section below to tell us about it.
