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Aussies less worried about debt, but still anxious about money

Aussies less worried about debt, but still anxious about money

Money – and making enough of it – continues to be a pressure point for many Australians. In fact, one in four households struggle to get by on their current income.

Even more people are worried about losing their income altogether. Almost half (44%) are concerned that they or their partner could be out of a job.

The proportion of the population worried about debt is also high, at 42%. Yet this is the lowest it’s been in more than four years of our nationwide CHOICE Consumer Pulse surveys.

Private health insurance has topped the list of cost concerns for the third time running. But the number of consumers baffled  by the various policy options – which spiked in our previous quarterly survey – has fallen.

The previous survey ran in March, when there was a buzz around new tiers of health insurance being launched by the Department of Health in April.

Health insurance still the biggest financial concern

The cost of private health cover is the biggest worry for most people (82%), followed closely by fuel (80%) and electricity (79%).

In March, we recorded a high of 62% of people who said that finding a health insurance policy to suit their needs was too complicated. The June survey brought this proportion back in line with previous results, at 53%. 

The result comes as the latest statistics from APRA show more than 28,500 people have ditched their hospital cover in the three months to 30 June. Young people aged between 20 and 24 made up the largest proportion of those turning away from hospital cover. 

Over the same period, almost 18,500 people have dropped their extras health insurance covering services such as dental and optical. 

The total number of people with health insurance cover dropped 0.3 percentage points compared to the previous quarter. 

Meanwhile, health insurance premiums have risen 2.8% in the past year.

Our survey reveals that health insurance has kept its status as the trickiest financial choice people make. It ranks above the 12 other major product categories we researched, including superannuation and mortgages. 

Most households ‘uncomfortable’ on their incomes

Concerns over which products and service providers to choose are mixed in with other financial stresses. Two-thirds of households are either just getting by or struggling to get by on their current incomes.

WA has the highest number of people really feeling the pinch. There, 33% of households find it hard to live on their incomes – up from 30% this time last year.

NSW and Queensland come in second. In both states, 26% of the population lives with financial stress.

Half of people living in NSW have the added worry of losing their jobs – the highest proportion of all states and territories with this concern.

The percentage of people in NSW finding it hard to get by on their earnings has risen from 19% this time last year. By contrast, Victoria has experienced almost an exact reversal in fortunes. A fifth of Victorian households now struggle – down from a quarter a year ago.

Victoria also has the lowest rate of people struggling on their incomes, along with the ACT, South Australia, Tasmania and the Northern Territory.

Debt worry slowly easing

A large proportion of people – two in five – are worried about their level of debt, but our research shows this worry is easing.

In surveys before 2017, people worried about their debt were always the majority. But from 2018 onwards, this group has shrunk to a large minority, averaging 45%.

Written by Saimi Jeong. Republished with permission of CHOICE.