Financial stress levels spike: NAB report records three-year high

More than a third of Aussies have experienced hardship after rate rises, inflation forced a recalibration of household budgets, says NAB.

About 40 per cent of Australians felt some form of financial hardship through the final quarter of 2022, according to NAB.

More than a third of Australians have experienced financial hardship in recent months as household budgets recalibrate to cope with inflation and the fastest interest rate increase in a generation.

Stress levels around money and bills hit a three-year high and continue to rise steadily, with 40 per cent of Australians feeling some form of financial hardship through the final quarter of 2022, according to National Australia Bank’s latest Financial Hardship report.

One in five Australians have missed a bill payment in the past three months and fear not having enough money in case of an emergency, while a further 16 per cent worry about buying food and basic needs.

Despite nine consecutive interest rate rises since May, being unable to meet mortgage repayments caused Australians the least amount of financial challenge at just 5 per cent.

NAB executive Mark Baylis acknowledged it was getting tougher for some people financially.

“We know most of our customers are in good shape but, for some Australians, financial difficulty might be an entirely new experience as a rising cost of living places increasing pressure on their personal finances,” Mr Baylis said.

Financial difficulty was more common among 18 to 29-year-olds and those aged between 30 and 49 than older age groups.

More than half of those living in rural and regional areas reported money stress, significantly higher than capital cities (33 per cent).

Hardship has spiked in Tasmania by 20 percentage points, with 45 per cent of people feeling stressed. It just edged out NSW and ACT, where 44 per cent of people reported they were struggling, up 11 percentage points.

Queenslanders also felt the bite of rates (now 42 per cent stressed, up from 34 per cent), but conditions in South Australia (28 per cent), Western Australia (41 per cent) and Victoria (37 per cent) either remained unchanged or improved.

Overall financial hardship levels were still lower than those reported in 2016.

The survey of 2000 people was conducted in the final quarter of last year.