October 7th 2024.
According to the latest research from financial services company AMP, money stress in Australia has reached its highest level in a decade. This is a significant increase from last year, as the company's Financial Wellness report found that only one in three working Australians now feel financially secure, compared to one in two in 2020. The impact of this financial strain is evident, with a third of Australians cancelling subscriptions like streaming services and gym memberships.
Many people are turning to their friends, family, and even social media for money-saving tips, rather than seeking help from a financial adviser. This ongoing financial stress is also affecting people's long-term financial planning, as they prioritize immediate cost-cutting over future savings. AMP bank group executive Sean O'Malley acknowledges that this is not surprising, given the rising cost of living and housing unaffordability challenges.
The research also highlights the struggles of those approaching retirement age, with almost two in five reporting moderate to severe stress. Even those earning between $100,000 and $150,000 are feeling the strain, with a 150% increase in the number of people who do not feel financially secure compared to two years ago. Melinda Howes, AMP group executive for superannuation and investments, notes that this financial pressure is causing many Australians to focus on paying their bills and staying afloat, rather than thinking about their long-term financial goals.
Despite these challenges, Howes reminds us that Australia's compulsory superannuation system provides a safety net for many, as most are automatically building their retirement savings. However, she also emphasizes that there is more to be gained from this system and encourages Australians to seek proper financial advice from banks and brokers to secure a better rate for their home loans. She believes that with high employment levels, there is potential for even greater benefits from the superannuation system.
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