Kantar state-of-the-nation report reveals the cost-of-living impact on Australia’s ‘mental wealth’ and the commercial and social leadership imperative for brands

• 53% have had life plans impacted by the cost-of-living crisis
• 61% don’t have the ability to tackle a major expense
• 72% do not feel optimistic about their financial future

Sydney, 30 November 2023: A staggering three quarters of Australians do not feel optimistic about their financial future (72 per cent) and over three in five don’t have the ability to tackle a major expense (61 per cent, +9 per cent since 2022) while almost two in five have been in a situation where their income didn’t cover living expenses (38 per cent, +8 per cent since 2022) and 13 per cent don’t have the ability to afford food basics or pay household bills (+3 per cent since 2022). This is the stark reality of the cost-of-living crisis on Australia’s collective mental wealth and financial sustainability, according to the 2023 Finding Financial Freedom study released by Kantar Australia.

Kantar’s third annual state-of-the-nation reveals that as the cost-of-living crisis continues to bite hard on Australia’s collective mental health, the nation is at a tipping point in how people feel and act about their own financial sustainability and future. Over half of Australians have had their life plans impacted by the cost-of-living (53 per cent), two-thirds are negative about the current economic climate (64 per cent) and two in five feel that their financial situation has worsened in the past 12 months (39 per cent).

The insights reveal the huge opportunity for brands to help Australians build much greater financial resilience, says Kantar Australia Head of Finding Financial Freedom Anagha Kanhere.

“With mounting debt, Australians are tapping into their emergency funds, borrowing from family or friends, or simply giving up on necessities. Younger Aussies are particularly feeling the pinch with 70 per cent of Gen Z and Millennials impacted in some way by the cost-of-living crisis. And the emotional impact has the potential to shape our whole society and culture for years to come.”

“Increases in our income and wealth will undoubtedly help, but the current economic outlook saddles key challenges: high inflation impacting pay rise potential, fewer people having the ability to save or invest money, a general lack of understanding of wealth building and investment products and lower levels of financial knowledge. Positively, more Australians (31 per cent) claim they have a higher level of financial knowledge than others (+4 per cent from 2022) but rising interest rates, costs and a competitive environment has led to lower satisfaction levels, especially in the borrowing and insurance categories. Lack of product understanding and the decline in financial confidence suggests the marginal growth in self-rated financial knowledge is merely a reflection of increased awareness of personal financial situations.”

“The big role for brands in building financial resilience is to start helping people navigate through their current situation and state-of-mind,” adds Kanhere.

“This has real implications for product and services communications and the delivery of experiences and content. Whatever you do, make it easy for people to understand and action.”

In Kantar’s recent Sustainability Sector Index, 50 per cent of Australians cited the economy including inflation as a key sustainability concern with mental health the top-ranked sustainability issue that Australians want acted upon now.

“As the rise of economic inequality challenges our proud narrative of egalitarian values and quality of life; seemingly endless societal disruption is taking a further toll on people’s feelings about risk, security and the future,” says Kantar Australia Head of Qualitative Carolyn Reid.

“There’s a very real relationship between financial understanding and mental wealth – and this is true irrespective of age or gender identity. Financial independence remains the biggest contributor to self-esteem for Australians, yet more and more of us now perceive finance and banking as a ‘scary’ subject. One-third (33 per cent) are overwhelmed by finance and banking (+9 per cent since 2022) and 55 per cent want to be more confident in understanding financial matters – a significant increase from 45 per cent in 2022 and 37 per cent in 2021.”

“The crush on Australia’s ‘mental wealth’ – self-esteem and the balance of a person’s confidence, resilience and understanding of how to create a sustainable financial future – is not only setting us up for potentially devastating consequences but shaping how we interact with financial products and services, how we respond to communications or advertising, and the type of customer experiences that motivate us to engage with a financial brand,” adds Reid.

“This will also be felt in how we shop beyond the financial services category. And it could infiltrate our lifestyles and life goals too – repercussions that will be felt for decades to come.”

“Overwhelmingly, taking leadership in finding ways to help Australians reduce financial stress and achieve financial sustainability must be a priority for brands, particularly for the seven in 10 females, Millennials and people with children who feel the most negative about their financial status quo. Interestingly, there is also no significant difference across income groups when it comes to financial pressures. That’s because finance is emotional and does not discriminate. It is heightened by anxiety, which significantly impacts how we perceive the world around us.”

“Brands have an empowering role to help close the gap between people’s financial desires, knowledge and decision,” says Reid.

“Australians continue to seek leadership in financial sustainability and messages that are emotionally positive and uplifting in tone. They are looking for brands to leave them feeling confident and inspired, and they want support to unlock and grow their mental wealth and financial capability. It’s the conversation we must continue to have.”

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