Financial stress is rising across Australia, but many households are responding with greater discipline and determination, according to the latest NAB Australian Wellbeing Survey released this week.
The quarterly report, prepared by NAB Behavioural and Industry Economics, found the NAB Household Financial Stress Index climbed for the second consecutive quarter, lifting to 47.2 in December from 46.3 in September – above the long-term survey average of 45.1. Concerns about retirement funding remained the dominant driver of stress, edging up to 56.8, while anxiety around essential expenses, emergency savings, and utility bills also increased.
Despite those pressures, three-quarters of Australians (75%) reported they were actively trying to save, with younger people aged 18–29 showing the strongest motivation. Women and men in that age group recorded saving rates of 89% and 85% respectively, reflecting a heightened awareness of housing affordability pressures and the need for long-term financial security, the report said.
The survey also found a broad shift towards more careful financial management. The net share of Australians spending less than they earn increased sharply to -11% in December, down from -2% in September – a sign of growing restraint across age, gender, and income groups.
NAB executive, broker distribution, Adam Brown said the data reflected what brokers were already observing on the ground.
“The latest NAB data reflects what many brokers are already seeing with their customers – a real mix of pressure and determination,” Brown said. “Australians are working hard to get their finances in order, saving more, and spending more carefully, but many are also navigating genuine financial stress.”
Brown said brokers had a key role in helping customers understand their options. “The aspiration for home ownership is clearly there – and so is the determination to get there,” he said.
The findings reveal a widening divide across demographic groups. Younger Australians aged 18–29 and lower-income households – those earning under $35,000 annually – face the sharpest financial strain. In the three months to December, 43% of Australians in the lowest income bracket struggled to meet non-essential expenses, while 48% were unable to raise $2,000 for an emergency – nearly double the national average of 26%.
By contrast, Australians aged 65 and over and those on higher incomes reported lower stress across almost every category, underpinned by reduced housing costs, lower debt exposure, and more stable income sources.
The NAB Australian Wellbeing Index, which measures happiness, life satisfaction, life worth and anxiety, fell to 62.8 in December from a two-year high of 64.2 in September, sitting below the long-term average of 64.3. The decline was broad-based, affecting 38 of the 44 demographic groups tracked in the survey.
The NAB findings arrive against a backdrop of mounting external pressure on household budgets. On Feb. 3, the Reserve Bank of Australia raised the official cash rate by 25 basis points to 3.85%, the first increase since November 2023 and a reversal of three consecutive cuts delivered across 2025. The RBA board cited a material pickup in inflation in the second half of 2025, stronger-than-expected private demand, and tightening labour market conditions as the basis for the decision. The move is expected to add further pressure to mortgage holders already stretched by cost-of-living burdens. Canstar calculated that an owner-occupier with a $600,000 mortgage and 25 years remaining would see minimum monthly repayments rise by $90 if banks pass the increase on in full.
Housing costs topped the list of financial worries heading into 2026, according to Canstar’s Consumer Pulse Report, with 22% of respondents nominating mortgage and rent concerns – more than double the level recorded five years ago. Millennials carrying home loans taken out before the RBA’s earlier tightening cycle have seen monthly repayments climb sharply, while renters face ongoing pressure from rising weekly rents.
The broader cost-of-living picture remained difficult through late 2025. Finder’s Cost of Living Pressure Gauge recorded that 77% of Australian households were under financial stress in October 2025, up from 57% in October 2019. Official data from the Australian Bureau of Statistics showed living cost indexes rose between 2.3% and 4.2% in the 12 months to the December 2025 quarter, with housing, food, and recreation among the main contributors. Age pensioners and government transfer recipients recorded the largest annual increases, at 4.2% and 4.0%, respectively.
A separate survey by Compare the Market found that only 7% of Australians believed the cost-of-living crisis had improved over the past year, and just 22% felt optimistic about the broader economy – even as inflation showed signs of moderating and the cash rate was cut three times in 2025. In response, Australians have adopted increasingly vigilant spending habits. Nearly three-quarters of those surveyed had shopped around for better deals in the past 12 months, with growing numbers comparing car insurance, home and contents cover, and electricity plans.
