Australians more financially stressed than last year

The NAB Australian Wellbeing Index inched down in Q4 and is now lower than at the same time last year.

Lower wellbeing was underpinned by higher anxiety, with concerns increasingly linked to the rising cost of living. Self-reported health outcomes also worsened during the final quarter of 2022, with Australians rating all aspects of their health (social, physical, and mental) lower.

The NAB Household Financial Stress Index looks at the role finances have on wellbeing. This comprehensive measure of financial anxiety is derived from several key potential household pressures including meeting the costs of healthcare, mortgage repayments, rent, credit cards, education, food & basic necessities, utility bills, insurance, holidays, entertainment, unexpected expenses, financing retirement, major household items, and home improvements & maintenance.

The index jumped sharply in Q4 to a three-year high of 44.2 pts (41.3 pts in the previous quarter and 40.3 pts at the same time last year). It is now also trending in line with the long-term survey average for the first time since Q1 2020.

Financial stress increased for all components of the index in Q4.

Not having enough to finance retirement is still the biggest driver of financial stress, with stress levels reaching 54.1 pts (52.2 pts in Q3). The next biggest drivers of stress were providing for our family’s future (47.4 pts up from 45.0 pts in Q3); non-essentials (46.2 pts up from 44.9 pts); medical bills and healthcare (46.0 pts up from 44.0 pts); home improvements and maintenance (45.8 pts up from 44.2 pts); and mortgage, rent, and housing costs (45.5 pts up sharply from 41.3 pts in Q3).

Having enough money to meet minimum credit card payments again caused the least stress (34.6 pts but up from 31.3 pts in Q3), followed by having enough for food and basic necessities (39.3 pts also up sharply from 35.8 pts in Q3).

Women (47.0 pts) reported much higher levels of financial stress than men (41.6 pts) in Q4. Women also reported higher stress for all index components, particularly medical bills and healthcare (49.8 pts, women; 42.2 pts, men); major household items (48.5 pts, women; 41.3 pts, men); and raising $2,000 for an emergency (46.1 pts, women; 39.0 pts, men).

By age, stress was equal highest in the 18–29 and 30–49 age group at 51.3 pts and significantly higher than in the 50–64 (37.2 pts) and over-65 age groups (27.8 pts). Financial stress was highest in the under-50 age groups for all measures and lowest for all measures in the over-65 group.

By region, stress was lowest in rural areas (43.9 pts) and highest in regional cities (44.8 pts) in Q4.