Three in ten financially stressed over impact of COVID-19

A weekly survey of Australians in response to the impact of COVID-19 has found that around 30 per cent of those interviewed reported feeling financially stressed in terms of paying for essential goods and services.

This is according to Taking the Pulse of the Nation, a new survey by the Melbourne Institute: Applied Economic & Social Research at the University of Melbourne. The survey tracks changes in the economic and social wellbeing of Australians living through the effects of COVID-19 and will provide a snapshot of how Australians are faring during the pandemic.

Now into its third week, the survey found noticeable changes for the 45-65 age group. Relative to the first week of survey results, the proportion of respondents who felt financially comfortable has dropped by 16 percentage points, while the proportion of those feeling financially stressed has increased by 10 percentage points.

The largest proportion of respondents experiencing financial stress are those in the 18-44 age group, with approximately two in five (44%) experiencing moderate to high levels of financial stress. Nearly 70 per cent of respondents in the 65+ age group reported that they were either moderately or very financially comfortable.

Senior Research Fellow at the Melbourne Institute, Dr Sam Tsiaplias said, “There are clear age-dependent effects in the data that belie the experience faced by some household groups. The presence of disproportionate financial stress in younger households is likely to curb growth in discretionary spending and limit the ability of such households to save for the future, potentially placing an additional burden on the welfare and social security system going forward.”

Dr Tsiaplias has also published a study this week on how targeted income support can help reduce household financial stress during COVID-19.

“The significant disparities observed across different household groups in the financial stress data highlight the importance of targeted income support measures, particularly for households with young children and disadvantaged groups, such as casual workers and single mothers, who are likely to experience levels of financial stress that are not reflected in standard financial stress indicators,” Dr Tsiaplias said.

The reports are available on the Melbourne Institute’s website.