1 in 3 Australians feel financially secure, down from half during the pandemic
1 in 3 Australians have cancelled streaming subscriptions and gym memberships, with more Australians turning to family, friends and social media for important financial decisions
Focus on short-term financial demands impacting longer-term planning
Financial stress levels in Australia are at their highest point in 10 years, according to AMP’s latest Financial Wellness report.
Now in its 10th year, the biennial research examines both the rising challenges and economic impact of financial stress among Australians aged 18 and over. Just one in three working Australians indicated they were financially secure in this year’s report, down from half of working Australians in 2020.
The flow on impact of financial stress also has a hidden cost, affecting the mental wellbeing of working Australians and their families, with a lack of willingness to seek professional help about important financial matters.
Almost one in three Australians who were ‘severely’ or ‘moderately’ stressed turned to friends or family members to help inform important financial decisions, with just one in nine speaking to their super fund and only one in 20 seeking help from a financial adviser.
Equally, one in three Australians have not used any information sources to inform important financial decisions, even if those sources were easily accessible such as podcasts, social media or a Google search.
With rising financial pressures and people focused on meeting major short-term expenses, long-term planning is being compromised with one in three saying they are never or are rarely planning for their financial futures.
AMP Bank Group Executive, Sean O’Malley said:
“It’s clear more Australians aren’t feeling secure with their finances, not surprising given cost of living pressures and housing unaffordability challenges.
“And while the research tells us that most are meeting their mortgage repayments, we know that savings rates are down and many are cutting back expenditure on household basics such as groceries, and other more discretionary items such as streaming services and holidays.
“Amid these cutbacks, it’s also evident that many aren’t taking advantage of the support available to them, with a tendency to bottle up their financial worries, in-turn impacting their mental wellbeing.
“We’d encourage more Australians to explore the options available to help them feel more in control of their finances. From a home loan perspective, this could be contacting a bank or broker to see if there is a better rate available on their loan, or different features which are better suited to particular circumstances. What seem like small things can make a big difference.”
AMP Group Executive, Super and Investments, Melinda Howes said:
“What’s also apparent from the research is that with a focus on paying the bills and keeping their heads above water, more Australians are understandably thinking and planning less about their longer-term financial goals.
“The wonderful thing about Australia’s compulsory superannuation system, is with Australia’s high employment levels, most are continuing to automatically build their retirement nest eggs. While Australians should take comfort from this, there is more to be gained from our superannuation system.
“At AMP, we offer our members the ability to get close to your super and feel more in control of their financial circumstances, with digital tools and simple advice available at no extra cost. We also offer a ‘Retirement Health Check’ with dedicated financial wellbeing support available for customers, at no extra cost.
“Services like this can help more Australians optimise their super, gain valuable insight into the magic of compound interest and how just a little extra contributed now can multiply in value over the long term. We encourage all our members to get in touch and speak with one of our friendly experts today.”
Other findings:
Transition to retirement remains complex
After a short period of relief between the ages of 51 and 54, stress levels lift sharply. In fact, Australians approaching retirement age have the highest levels of stress of any age group surveyed, with almost two in five being moderately to severely stressed. For many Australians, this fear is heightened when the rising cost of living eats away at your lifetime savings.
Sharp rise in stress for those earning between $100,000 and $150,000
A growing number of Australians earning between $100,000 and $150,000 reported to be less financially secure. Nearly one in four Australians in this income bracket said they were ‘severely’ or ‘moderately’ financially stressed, up by 150% in the space of just two years and nearly triple of those who reported the same during 2020 – raising further questions around how much is needed to feel financially secure.
Financial secrets
The findings also point to a growing number of financially stressed Australians keeping secrets about their finances. Close to one in three have financial secrets, worries, or behaviours they have not shared with anyone else. Of those, almost two in three said they feel ‘embarrassed’ or ‘guilty’ about them and almost one in four believe there is no need to share them.
Letting go of discretionary spend
Faced with the rising cost of living, more Australians are drawing down on accumulated savings and cutting down on their everyday spending, finding new ways to save on non-essential services. Three in five Australians spent less on groceries this year, two in five went without a holiday and one in three spent less time engaging in regular hobbies and interests. Meanwhile, over half of Australians strongly agree that the cost of living will continue to rise significantly, with less than a third saying they will be financially secure over the next two years. In addition, one in three have cancelled streaming subscriptions and gym memberships due to financial pressures.
More ‘alone time’
Financially stressed Australians are more likely to reduce both spending and social behaviours or reach out for professional support. Half of those that were ‘severely’ or ‘moderately’ financially stressed spent less time with friends, two in five were more likely to internalise their stress and spent more time in isolation, while over one in three spent less time with family.
Tips for building financial wellbeing
1. Speak to a Super Coach to get reliable information and support: AMP Super coaches can help you get close to your super, with digital tools and simple advice all with no extra fees. AMP also offers a free ‘Retirement Health Check’ with dedicated financial wellbeing support available for customers. Learn more at Superannuation - AMP.
2. Check your home loan is right for you: Speak to your bank or broker and learn how a better rate on mortgage can help you save more. There are a range of home loan products on the market which come with different features based on customers’ preferences, needs and eligibility. Consider what loan options best suit you and your individual circumstances.
3. Get assistance when you need it: There’s plenty of research showing that people who draw on expert advice are less financially stressed and make better decisions. Use reputable sources such as your financial institution, government resources, and trusted third-party comparison websites.
4. Subscribe to our podcast: AMP’s Simplifying Investing podcast with Shane Oliver and Diana Mousina features regular insights from two of Australia’s leading economists to help you demystify the world of superannuation, investing, retirement, home loans and beyond.
5. Check out our Insights Hub: Helpful resources are often available on lenders’ websites, and budget/tracking apps can provide a clear view of your spending patterns. Some examples include AMP’s Insights Hub, our budget planner calculator and expense planner calculator, and ASIC’s MoneySmart tools.
About the research
AMP commissioned The Behavioural Architects in July 2024 to conduct a survey of 2,475 Australians aged 18 years and over in relation to their attitudes to financial stress and levels of financial wellbeing. The survey included Australians who are currently employed, unemployed, retired and also small business owners (0-19 employees).
