Key statistics from this release:
80 percent of Australians are experiencing high or extreme levels of bill stress, with half cutting back on essentials like groceries and fuel
Utility bills have overtaken mortgages as the top source of bill anxiety, with one-third of Australians spending over 50 percent of their income on household bills
Buy Now, Pay Later (BNPL) usage has soared 28% as consumers leverage these services to conserve cash for essentials like bills
Victorians reported the highest levels of bill stress, at 67 percent, while mortgage stress peaks for the 35-44 age group, along with utilities and childcare costs
Despite the high-stress levels, there is a silver lining: more people are proactively seeking financial advice and budgeting to reduce costs
Read the full Bill Stress Index HERE.
Tuesday, June 18, 2024: Over half of Australians are being forced to cut back on necessities like groceries and fuel as the unrelenting cost-of-living crisis crushes household finances. New Research from Compare Club's biannual Bill Stress Index*, released today, exposes the severe financial strain experienced in homes nationwide.
The nationally representative survey found that 4 in 5 respondents experienced high or extreme levels of "bill stress," defined as rating their stress at level 4 or 5 on a 5-point scale, with one-fifth (21 percent) admitting to struggling just to make ends meet.
Utility bills have overtaken mortgages as the biggest source of bill anxiety, with 22 percent citing utilities as their chief stressor. However, the strain is felt across housing, insurance, education, and childcare.
“Alarmingly, a third of Aussies allocate over half of their income towards household bills. It raises huge red flags about the ability of families to stay afloat. Hopes for a rate cut have vanished thanks to April’s inflation figures, and there is still speculation that the RBA will announce another rise before the end of 2024, so it doesn’t seem like there will be relief anytime soon," said Kate Browne, Compare Club's Head of Research.
"When banks see such a high proportion of income going towards bills, it raises concerns about a person’s ability to service additional debt. This could potentially restrict access to credit and limit financial opportunities," says Ms Browne.
In a troubling revelation, more Australians are using buy-now-pay-later as bill lifelines. Buy-now-pay-later Usage Has increased by 28 percent. Of those who have paid a bill late, over 50 percent have used Buy-now-pay-later and borrowed money from a family member or friend.
"The fact that so many young Australians are turning to BNPL services and personal loans to afford basic necessities is a worrying sign of their financial strain. While convenient, these services can lead to a cycle of debt if not managed carefully," says Browne.
BILL STRESS STATE BY STATE
The impact is being felt nationwide, with Victorians reporting the highest levels of bill stress (67 percent just getting by or struggling), followed by South Australia and New South Wales. Mortgages and utilities are the most common causes of anxiety.
Western Australia was the least stressed state.
State-by-state snapshot:
Victorians reported the highest stress levels, with concerns about general insurance, childcare, and school fees. 67 percent are struggling financially.
South Australia has above-average stress, particularly regarding car loans.
New South Wales experiences higher stress about rent, utilities, car loans, and life insurance.
Queensland's fastest-growing stressors are life insurance and childcare/school fees. Rent anxiety is trending upwards.
Western Australia, the least stressed state, avoided increased childcare/school fees stress. However, general insurance stress grew by 65 percent.
Fewer people are switching providers to secure better deals than November, suggesting that many households have already exhausted cost-cutting measures.
"Our goal is to empower Australians with the tools and information to make informed decisions and maximise their savings. Utility bills should be checked every six months to ensure you’re on the best deal," said Ms Browne.
BILL STRESS & AGE
Regardless of your age, there is likely at least one bill you are stressed about. For most, stress is concentrated around utilities and living expenses. However, given different bill priorities for those aged:
55+: General insurance stress spiked 82 percent from last year
45-54: Car loans and school fees stress increased by 30 percent+, while credit card and rent stress decreased by 35 percent+
35-44: Housing, utilities, and general insurance stress dominates
25-34: Rent stress increased; school fees/childcare stress spiked 100percent+
18-24: Stress across all bills, especially health insurance and loans.
Despite the deep bill stress, this crisis has a silver lining. More people are proactively seeking financial advice and budgeting to reduce costs.
“Our report has shown that parents lead the way by being proactive, saving, and budgeting. While families with young children tend to cop it financially from the cost of childcare to mortgage or rent and utilities, they are reporting a lower level of stress than our other demographics, showing they are stepping up to manage their money as best they can.”
NOTES TO EDITORS
*Research conducted by Pollfish; 1000 total respondents in November **Research conducted by Pollfish; 1000 total respondents in May For media enquiries & to request a copy of the report:
Jasmine Kostas Media + Capital Partners 0425 327 224 jasmine.kostas@mcpartners.com.au About Compare Club
Compare Club is one of Australia’s fastest-growing personal finance marketplaces, it helps Australians save money by navigating complicated and important financial decisions. Compare Club’s panel of experts offer bespoke advice to over 4.5 Million members making 1 Million product enquiries per year on key financial decisions, including health insurance, electricity & gas bills, personal, car and home loans. Compare Club is locally owned and employs over 450 passionate staff across Sydney, Melbourne, Brisbane and another 50 staff in Indonesia and the Philippines.
