ANZ Roy Morgan: Financial Wellbeing Indicator June 2023

The ANZ Roy Morgan quarterly Financial Wellbeing Indicator (FWBI) report was released. It showed an overall decline in the financial wellbeing of Australians due to economic conditions such as the rising cost of living, particularly for homeowners paying off a mortgage. This decline exemplifies the need for organisations to support staff, clients, and the community through concerted actions to mitigate financial stress.

The following is a summary of key findings from the report:

• Financial wellbeing fell 1.4% from December 2022 (down 5.3% year on year). The decline in financial wellbeing in the first quarter of 2023 has led to a further increase in the size of the struggling segment to 18.0% of the Australian population in March 2023, up from 17.2% in December 2022 and 14.8% in March 2022.
• There was a greater impact on the financial wellbeing of Australians with more exposure to rising interest rates and rental costs. Between December 2022 and March 2023 there was a larger decline in financial wellbeing among those paying off their home (down 2.3%) and renters (down 1.3%) than among those who own their home outright (down 0.9%).
• While the decline overall has been mostly driven by whether people are feeling comfortable about their financial situation, Australians are finding it increasingly hard to meet commitments. Examining the results on a 3-month moving average shows that while the ability to meet commitments fell among Australians overall between December 2022 and March 2023 (down 1.6%) the decline in meeting commitments was more evident amongst renters (down 4.9%) than those paying off their mortgage (down 0.8%) or who own their home outright (down 0.7%).
• To ‘make ends meet’, renters appear to have several strategies including drawing down on deposits, increasing purchases on credit, and seeking employment leading to full-time work. By contrast, those paying off their mortgage are drawing down on their deposits and increasing purchases on credit but not seeking employment, while those owning their home outright are only increasing purchases on credit.