Young Australians have been significantly affected by the financial impacts of COVID-19, with 44% of those aged 14-39 reporting that they were either stood down or had their pay or work hours reduced between March and May 2020, according to new research from ANZ.
The study further reveals that more than a third of young Australian adults and families entered the crisis with less than one month’s income in savings. The ANZ Roy Morgan Financial Wellbeing Indicator shows a decline in the average financial wellbeing of Australians, dropping from a pre-COVID-19 level of 60.7 out of 100 to a post-COVID level of 56.5.
ANZ Deputy Chief Executive Officer Alexis George stated, “As a group, young people are less likely to have been actively saving before the pandemic began and many of them have also had their work hours or income reduced, so it has been incredibly tough for them.”
George added, “We’re continuing to offer a support package for customers who are experiencing ongoing financial difficulty due to COVID-19. We also have a range of tools available to help people with budgeting and saving – behaviors that contribute to higher financial wellbeing.”
The ANZ Roy Morgan Financial Wellbeing Indicator identified several factors contributing to the decline in financial wellbeing:
- Across all three dimensions from March to May 2020, 'Feeling comfortable' decreased by 13.7%, 'Meeting everyday commitments' declined by 5.5%, and 'Resilience for the future' fell by 1.9%.
- Young Australians were most financially impacted by COVID-19, with 44% of young adults and 36% of young families affected compared to only 27.3% among those aged 40 and older.
- Before COVID-19, over a third of young adults and families reported having less than one month's income saved.
- On average, young adults had saved an equivalent of 2.4 months’ income prior to the pandemic; for young families it was 2.8 months compared to older families who had saved about 6.5 months.
The ANZ Roy Morgan Financial Wellbeing Indicator is derived from the Roy Morgan Single Source survey conducted annually on approximately 50,000 Australians, evaluating financial behaviors along with psychological, social, and economic factors influencing financial wellbeing. ANZ publishes this indicator quarterly.