Cost-of-living pressures push younger borrowers to cut back, delay milestones and lean on brokers for guidance
Financial stress linked to the cost-of-living and housing crises is weighing heavily on young Australians, with most reporting impacts on their wellbeing and many cutting back on essentials or delaying key life decisions, according to a new study.
Research by P&N Group – the customer-owned banking group behind P&N Bank and BCU Bank – shows that 84% of Gen Z and Millennial respondents say money worries have affected their wellbeing, and 45% report an impact on their mental health.
Only 3% of young adults in the survey said they were “thriving financially”, underscoring the extent of the pressure on younger cohorts navigating higher rents, rising mortgage costs and stagnating affordability.
Two in five respondents reported scaling back their spending on essentials such as groceries, transport and healthcare. More than one in three are no longer putting money into savings. Around one in 10 have decided not to have children because of the expense, while a significant share have postponed moving out of the family home – a trend that can add strain to parents as they near retirement.
P&N Group also found that about three in 10 young Australians say money stress is affecting their sleep, concentration, decision-making or self-esteem. Around one in three have put off seeing a doctor or dentist, and 28% have delayed paying bills. Nearly three in 10 have postponed seeing a mental health professional, filling a prescription or buying health-related products.
“What we’ve uncovered is the difficult reality many young Australians are experiencing, with only 3% of Gen Zs and Millennials feeling they are thriving financially,” said Jacob Wrigley (pictured right), head of virtual banking at P&N Group.
“Of those surveyed, two in five have cut back on essentials, with one in 10 opting not to have children because of the costs involved. They are also more likely to have delayed moving out of home, which can place a greater financial burden on parents as they approach retirement.”
Despite this, a notable minority are withdrawing from active money management altogether. “One in five young Aussies are avoiding proactively reviewing and managing their finances entirely, finding it too overwhelming or stressful,” Wrigley said.
“Worryingly, those falling behind are less likely to believe financial knowledge can improve their mental wellbeing, reflecting a sense of helplessness and less active money management.”
On the positive side, P&N Group reports that the majority of respondents believe improving their understanding of money would support their mental wellbeing. Nearly half already review their spending or set personal financial goals, which the group characterises as early steps towards better control.
“While these generations have grown up in uncertain times, there seems to be more opportunity for self-education and empowerment to take ownership of financial literacy,” Wrigley said. “And brokers play an important role in this.
“I can see a change in the younger generation over the last five years, with some seeming to value financial freedom over traditional milestones, such as marriage or buying a home. Alongside this, social media has normalised having conversations about money and made saving and investing information more accessible and relatable than ever.”
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