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Data from NAB has revealed that financial stress is the highest since mid-2016.
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Financial wellbeing ‘at lowest point’ since COVID, says major bank
26 February 2024
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10 minute read
Almost one in three Australians believed they were worse off financially in the fourth quarter of 2023 compared to a year ago, according to the latest NAB Australian Wellbeing Survey.
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The NAB Australian Wellbeing Index fell in the final quarter of 2023, sliding to its lowest point since the onset of COVID when the Index was at an equal survey low.
“Australians reported lower wellbeing across most measures during the December quarter, with all indicators printing well below survey average levels,” the survey report said.
After easing a little in the previous quarter, financial stress increased in the December quarter - with financial stress levels now at their highest since mid-2016 and trending well above the survey average.
Financial stress levels rose across all age groups in the fourth quarter, except for those 65 years and older and remains highest in the 30-49 age group.
“By income, financial stress levels increased in the lower income group but fell in the higher income group - though still trending well above average,” the survey said.
“People in the lower income group reported higher stress for all index components, with the biggest gap in stress levels for raising $2,000 for an emergency, food and necessities, normal monthly utility bills and major household items.”
The survey indicated there was a decline in the number of Australians who saw an increase in their income or pay. Only one per cent of respondents in the survey saw their income or pay increase in the fourth quarter versus 9 per cent in the September quarter.
Looking forward, NAB said around one in five or 26 per cent of Australians on balance expect their incomes to rise in the next 12 months.
Expectations were more positive in the higher income group at 40 per cent in Q4 versus 35 per cent in Q3.
“With a somewhat lower number of Australians indicating their incomes increased in the December quarter, Australians on average were also more concerned over their income or pay,” the major bank said.
“When asked to rate their overall level of concern or stress over their income or pay reached a survey high.”
The survey also showed that fewer Australians made inroads into reducing household debt levels in December.
Australians holding debt were also asked to rate their concern for all types of debt they held.
“With interest rates elevated, concern over total debts rose to a survey high,” NAB said.
While the number of mortgage holders with very high concern fell slightly to 53 per cent in the fourth quarter, down from 55 per cent in Q3, it remains much higher than one year earlier when it was 42 per cent.
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