Time to read : 5 Minutes
Figures from Compare Club’s bi-annual Bill Stress Index show that energy bills are the number one source of anxiety for Aussie households, as the ongoing cost of living crisis continues to drive stress levels up for managing finances.
The November Index also showed that people of all incomes are struggling while there’s been a massive increase in high earners using more than 75% of their take-home pay on bills.
Here are some of the key takeaways from the November Index:
More than three-quarters of Aussies reported high levels of bill stress.
45% said utility bills were the top financial stressor.
More than a quarter of respondents said they were stressed about mortgage repayments while 20.09% reported rent was a big stressor.
Managing health insurance premiums is the third highest stress driver at 14.22%.
Let’s take a closer look at some of the biggest stressors and ways you can manage bill stress.
Energy bills and utilities
“We’re seeing a concerning shift in energy anxiety” – Kate Browne, Head of Research, Compare Club
Managing utility bills was the top stressor in our November 2024 Bill Stress Index with almost one in two Aussies struggling with high energy costs. Many are also worried about the reliability of energy supply as temperatures soar in summer.
As heatwaves have the potential to cause blackouts, Aussies are increasingly concerned about the impact of outages especially when relying on medical equipment or cooling during extreme weather events.
“Many Australians are concerned about the possibility of longer and more frequent outages this summer than we’ve ever seen historically. And it’s understandable how the threat of blackouts is extremely stressful for anyone dependent on life support, medical equipment or reliable cooling,” said Kate Browne, Compare Club’s Head of Research.
What else are Aussies stressed about financially?
The Bill Stress Index illustrates just how stressed Australian households are about the cost of bills.
Those in the higher income brackets reported that they are allocating more than 75% of their income to pay for bills (11.54%). This is a massive jump of 246% from the previous index of 3.33%.
One possible reason for this increase may be the holiday season, during which high-income earners tend to spend beyond their means in the lead up to end of year events.
But… the age group faced with the biggest challenge of stretching their income is the 35-54 year olds.
More than 13% of this group reported they’re spending over three quarters of their income on bills.
37% reported they’re spending more than half of their income on bills.
For someone who is spending a significant portion of their money on bills, it can make it harder to apply for other forms of credit such as a home loan.
“Banks and lenders are assessing potential borrowers in terms of them being a safe bet to lend to. When an applicant has a large portion of their income going towards bills, it raises questions about a person’s ability to service the loan. This could restrict somebody’s access to extra credit such as a car loan, personal loan or home loan,” said Kate.
What about mortgage stress?
The November Index found that 28.14% of 25-34 year olds cited mortgage stress as their number one stressor.
To get onto the property ladder it’s possible that Aussies in this age group have turned to the Bank of Mum and Dad to help scrape together a deposit. They’re also likely to have used Lenders Mortgage Insurance (LMI).
As this group has stated mortgage as their biggest stressor, there’s a strong indication they may not have enough of a buffer to allow for any hikes or increases and are doing it tough to keep up with repayments.
Kate’s tips to manage bill stress
Energy
If you have options where you live, make sure you’re on the best possible energy deal in the market. As a rule of thumb if you haven’t reviewed your energy deal in 12 months there’s a good chance you could be paying more than you need to.
The Bureau of Meteorology has forecast a hot summer season which means cooling systems will be running around the clock.
Make sure you’re on the best deal, ask about any discounts and check if there are any concessions you might be eligible for. It’s super easy to switch providers and can make a big difference to your bills.
Loans
If you have a mortgage and other debt such as a car, personal loan or credit cards it can be a good idea to speak to your lender about debt consolidation. With interest rates on home loans generally at a lower rate than other types of loans, this means that overall you’ll have a lower interest rate to pay and far less fees, as well as having just one payment to deal with.
Health insurance
There's talk already that there could be a big hike in health insurance premiums in April. While we won’t know for sure until it’s announced, the average increase may be higher than last years’ increase of 3.03%.
So… now may be a good time to get in early and find a better value health insurance policy. If you haven’t reviewed and compared your health insurance policy in three years it’s definitely time to see what other offers are out there – you may find you can get better value as well as saving on your premium.
Even better, plenty of funds are offering four or six weeks free to new members which will save you even more.
Bottom line
Our check-in on Aussies shows just how stressful energy and housing costs are across the board. And the reliability of energy supplies is also causing anxiety.
But there is some good news: overall bill stress has decreased by an average of 21% across key bills like mortgages, energy and insurance since we last surveyed the country in May.
With 2025 being an election year, we’ll be keen to see if election promises impact how Aussies will feel about finances in our next bill stress index.
Go deeper:
About the November 2024 Bill Stress Index:
Our survey results included responses from more than 1,000 Australian households from New South Wales, Victoria, Queensland, South Australia and Western Australia, aged between 18 and 55+.
