Financial stress hits highest level in a decade as cost-of-living pressures mount

Financial stress levels in Australia have hit their highest point in 10 years. New analysis by AMP found just one in three working Aussies felt financially secure, down from half during the pandemic, as cost-of-living pressures mount.

There has been a sharp rise in stress for workers earning between $100,000 and $150,000, with nearly a quarter of Aussies in this bracket reporting they were “severely” or “moderately” financially stressed. This was up 150 per cent in the space of two years and nearly triple from 2020.

AMP Bank group executive Sean O’Malley said Aussies were not able to save as much as previously and were cutting back their spending on essential expenses like groceries, along with discretionary spend like streaming services and holidays to stay afloat.

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“It’s clear more Australians aren’t feeling secure with their finances, not surprising given cost-of-living pressures and housing unaffordability challenges,” O’Malley said.

Three in five Aussies spent less on groceries this year, two in five went without a holiday and one in three spent less time on their hobbies and interests.

A third also cancelled streaming subscriptions and gym memberships to help cope with financial pressures.

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Aussie families feeling the pinch

Gold Coast mum Leah Selfe said rent, groceries and school costs for her 15-year-old son, Charlie, were the biggest pressures on her budget right now, leaving her with little wriggle room to save.

“Those are the biggest ones that I would say I have noticed have been the most stressful,” the business owner told Yahoo Finance.

“We’ve been living on the Gold Coast for close to nine years this year. In that nine years, what I paid in rent back then to what I pay now has doubled easily.

“With groceries, I find that I go to the shops and I come home with fewer and fewer bags and fewer and fewer items, which can sometimes be extremely depressing.”

Selfe said she had cut back on expenses, including being more mindful with her family’s grocery shop, doing meal prepping and having “uncomfortable and hard conversations” with her son about what activities they could and couldn’t afford.

She said saving for retirement had also become more difficult given current cost-of-living pressures, with the self-employed Aussie admitting she hadn’t paid herself superannuation in two years.

Aussies urged to seek help

AMP’s research found people’s focus on current financial pressures was impacting their ability to plan for longer-term goals.

It found financial stress was highest among those approaching retirement, with nearly 40 per cent “moderately” to “severely” stressed.

“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,” AMP group executive, super and investments Melinda Howes said

She encouraged Aussies to take a closer look at their superannuation and speak to their fund to feel more in control of their financial circumstances.

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