Money Research with Money Matchmaker®
What financial challenges are Australians facing this year?
A Money.com.au Study July 2022
About the study
Money.com.au commissioned a survey of an independent panel of 1018 Australian mortgage holders to determine their biggest financial worries, from a list of eight, and whether they will face significant challenges meeting their expenses and repayments this year.
Respondents were also asked whether the measures announced in the Federal Government budget earlier this year, such as the one-off $420 cost of living tax offset for low- and middle-income earners, would reduce their financial worries.
The pool of survey respondents matches the geographical spread of the Australian population.
What financial concerns are Australian mortgage holders facing?
Money.com.au asked Australian mortgage holders to identify their biggest financial worries from a list of eight. Respondents could select more than one response.
- Concerns over meeting the rising cost of living came out on top (chosen by 61 per cent of respondents)
- Having a financial buffer in case of an emergency ranked second on the list – chosen by 43 per cent of mortgagors
- Having enough cash flow to pay bills, chosen by 39 per cent of respondents, ranked third
- Meeting healthcare costs, including private insurance, and being able to afford non-essential spending ranked an equal fourth, with 36 per cent of respondents choosing these as their largest worries
- Having adequate cash and assets to retire with ranked fifth, chosen by a third (33 per cent) of mortgagors
- The ability to meet mortgage repayments amid interest rate increases ranked sixth – chosen as one of the top concerns for 27 per cent of respondents
- Paying off other debts, such as credit cards, personal loans and car loans, ranked seventh – chosen by 22 per cent of respondents
Concerns for under-35s and over-35s
Money found that financial concerns between under-35s mortgagors and over-35s differed markedly. Mortgage-related concerns was ranked highest among young mortgagors, after meeting the rising cost of living (which ranked first for all age groups). This suggests that young borrowers took out a home loan recently, when house prices were at their peak, and may have borrowed the maximum amount.
Meeting the rising cost of living
Meeting the rising cost of living was chosen as a top concern for
- 63 per cent of 18-34-year-olds
- 60 per cent of over-35s
Meeting mortgage repayments
For under-35s, meeting mortgage repayments ranked second as a financial concern – chosen by 44 per cent of respondents.
In contrast, this concern ranked sixth for over-35s mortgagers. This age group ranked ‘having a financial buffer in case of an emergency’ second in their list of concerns.
Having enough cash flow to pay bills
Under-35s and 35-49-year-olds ranked ‘having enough cash flow to pay bills’ third on their list of financial concerns – chosen by 40 per cent of the former and 44 per cent of the latter.
However, only 37 per cent of over-50s chose this as a top concern, ranking it fourth.
Financial concerns across the States
Rankings across the States were similar to rankings across the full respondent pool. Meeting the rising cost living came out on top as the major financial concern in each State:
- 69 per cent of WA mortgagors selected this concern
- 64 per cent in SA
- An equal 60 per cent in NSW and Victoria
- 57 per cent in Queensland
Having a financial buffer in case of emergencies
This was ranked second across all States: this concern was chosen by:
- 50 per cent of ACT mortgagors
- 46 per cent of NSW mortgagors
- 45 per cent in South Australia
- 43 per cent in Western Australia
- 39 per cent in Queensland
Having enough cash flow to pay bills
Having enough cash flow to pay bills ranked:
- Third in NSW and Queensland (chosen by an equal 39 per cent of respondents),
- Victoria (chosen by 35 per cent)
- Western Australia (41 per cent)
- In South Australia this concern ranked an equal second with having an emergency buffer (each chosen by 45 per cent of respondents)
- In the ACT it ranked fifth
Which are your biggest financial worries this year?
| Response | NSW (%) | VIC (%) | QLD (%) | SA (%) | WA (%) | ACT (%) |
|---|---|---|---|---|---|---|
Having enough cash flow to meet my bills | 39 | 35 | 39 | 45 | 41 | 33 |
Meeting my mortgage repayments, with interest rates about to increase | 34 | 28 | 23 | 22 | 20 | 46 |
Paying off other debts such as credit cards, personal loans, car loans | 23 | 19 | 27 | 21 | 21 | 25 |
Meeting the rising cost of living (e.g. petrol prices, grocery prices) | 60 | 60 | 57 | 64 | 69 | 54 |
Healthcare costs, including private health insurance | 38 | 33 | 38 | 28 | 39 | 42 |
Having adequate cash and assets (such as a paid off property) to retire with | 36 | 29 | 33 | 30 | 37 | 17 |
Having a financial buffer in case of an emergency | 46 | 40 | 39 | 45 | 43 | 50 |
Being able to afford non-essential spending such as holidays, entertainment, gifts. | 38 | 32 | 36 | 44 | 37 | 42 |
What proportion of mortgagors will have significant challenges meeting their expenses and repayments this year?
Nearly half (48 per cent) of Australian mortgagors admitted they would have significant challenges meeting all their expenses and repayments this year.
NSW affected the most
Money.com.au found more NSW mortgagors (52 per cent) expected to face significant challenges meeting their expenses and repayments this year. Along with:
- 50 per cent of Queenslanders
- 49 per cent of Victorians.
In contrast to:
- 39 per cent of South Australians
- 38 per cent of WA residents
Do you think you will have significant challenges meeting all your expenses and repayments this year?
| Response | NSW (%) | VIC (%) | QLD (%) | SA (%) | WA (%) | ACT (%) |
|---|---|---|---|---|---|---|
Yes | 52 | 49 | 50 | 39 | 38 | 54 |
No | 48 | 51 | 51 | 61 | 62 | 46 |
Age as a factor
Money.com.au found that the younger the age group, the more likely they would struggle with meeting their expenses and repayments this year.
- More under-35s mortgagors (60 per cent) expected to have these challenges
Compared with:
- 50 per cent of 35-49-year-olds
- 44 per cent of over-50s.
Missed repayments can have a negative impact on a person's credit score. Younger Australian tend to have a lower credit score to start off with on average.
What proportion of mortgagors think the measures announced in the Federal Government’s budget will reduce their financial worries?
Money.com.au also sought to find out how Government schemes would reduce financial worries for mortgage holders.
In March 2022, the Federal Government announced several measures, the majority of which came into effect in March and July this year, such as:
- $250 one-off payment to six pensioners, carers, veterans, job seekers, concession cardholders and some self-funded retirees
- One-off $420 tax offset for low and middle income earners
- 22c cut in fuel tax for six months, 20 weeks paid parental leave
- $5000 payments over two years for new apprentices as they complete their training in industries with skills shortages
Will it have an effect?
When asked whether these measures would reduce their worries:
- 49 per cent of mortgagors said they would in the short term only
- One third (36 per cent) said it would not ease their worries at all
- 15 per cent revealed the measures would support them financially over the next year.
How it compares State to State
- More South Australian mortgagors (45 per cent) than those in any other State admitted the proposed Government measures would not reduce their financial concerns at all
This is compared with:
- 35 per cent of Victorians
- 31 per cent of WA mortgagors
- 29 per cent of those in the ACT
Will the Federal Govt measures announced in its 29 March Budget reduce any of your financial worries?
| Response | NSW (%) | VIC (%) | QLD (%) | SA (%) | WA (%) | ACT (%) |
|---|---|---|---|---|---|---|
Yes, but only in the short term | 48 | 51 | 50 | 40 | 53 | 58 |
Yes, over the next year | 16 | 15 | 14 | 15 | 16 | 13 |
No | 36 | 35 | 36 | 45 | 31 | 29 |
Under-35s feel the most relief short term
More under-35s mortgagors (56 per cent) said the measures would reduce their concerns in the short term.
Compared to:
- 35-49-year-olds (48 per cent)
- over-50s (46 per cent)
