27 November 2024 - As New South Wales braces for potential rolling blackouts during this week's heatwave, new research reveals an unprecedented surge in financial pressure across Australian households, with energy bills emerging as the primary concern for families across all income brackets.
Compare Club's latest Bill Stress Index shows utilities remain the top financial stressor for 45% of Australians. The research comes as the East Coast faces one of its most significant tests of grid reliability since the closure of the Liddell Power Station.
"We're seeing a concerning shift in energy anxiety," says Kate Browne, Compare Club's Head of Research. "Not only are Australians struggling with high energy costs, but they're also increasingly worried about the reliability of supply. Many are expressing concerns about longer outages this summer than we've seen historically, particularly those dependent on medical equipment or air conditioning during extreme heat."
The research reveals a startling 246% increase since May 2024 in high-income households using over 75% of their income for bills, challenging assumptions about financial security among higher earners. This pressure is evident across all major expenses, with mortgage repayments stressing 26.14% of respondents and rental costs impacting 20.09% of Australians.
"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.
The financial strain shows distinct patterns across age groups. Young Australians (18-24) are grappling primarily with rental stress, which has grown by 6.6% in the last six months, while their mortgage stress has notably decreased by 34%. Middle-aged Australians (35-44) face the highest mortgage stress, at 31.22%, despite an 8% decrease since May.
For older Australians (55+), utilities dominate concerns at nearly 30%, followed by rising general insurance costs, which have increased 8% to 22.75% in the past six months. Health insurance has emerged as their third highest concern at 14.22%.
Regional variations paint a complex picture of financial stress across the country. While NSW residents report the highest mortgage stress nationally, Victorians lead in utilities stress. Queensland shows the highest car loan and general insurance concerns, while Western Australia reports the highest stress related to Buy Now Pay Later services.
The research indicates shifting payment patterns among Australians. While three in five are now paying bills on time - a 14% improvement since May - there's been a notable 50% surge in Buy Now Pay Later services usage. Traditional credit card use for bill payments has decreased by 4% since May, suggesting a shift in how Australians manage their expenses.
"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.
Despite these challenges, there are some positive indicators. Overall, bill stress has decreased by an average of 21% across key bills in the last six months, with insurance and childcare costs currently causing the least stress.
However, Browne warns this improvement might be temporary given the mounting pressure on the energy grid and broader economic challenges ahead.
"Our goal is to help Australians make informed decisions about their largest household bills and to maximise their savings. No one should pay more than they need to for energy, the best way to ensure you are getting the very best deal on the market is to check every six to twelve months. ," said Ms Browne.
If you rely on life-support equipment in NSW, QLD, or Victoria, take these steps to stay safe during power outages:
Before an Outage
Register with Your Energy Provider: Notify them you use life-support equipment to receive priority assistance and outage notifications.
Create an Emergency Plan: Work with your doctor to plan for outages, including relocating if necessary.
Prepare Backup Power: Have a generator, UPS, or fully charged batteries ready.
Pack Essentials: Include portable chargers, a flashlight, and medications.
During an Outage
Activate Your Plan: Switch to backup power immediately if you have it.
Contact Your Provider: Report the outage and mention your life-support needs.
Relocate if Needed: Move to a hospital or safe location for extended outages.
If the situation becomes life-threatening, call 000. Preparing in advance ensures your safety and continuity of care.
-ENDS-
NOTES
*1000 people surveyed
For media enquiries:
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 offers bespoke advice to over 3.6 million members making 1 million product enquiries per year on key financial decisions, including health insurance, electricity and gas bills, and personal, car, and home loans. Compare Club is locally owned and employs 350 passionate staff across Sydney, Melbourne, and Brisbane and another 50 staff in Indonesia and the Philippines.
