Sky-high living costs are weighing heavily on younger generations and leading to much higher levels of financial stress compared with older cohorts, research indicates.
Finder’s latest cost of living report found 70 per cent of Generation Z respondents were reporting financial stress compared with 29 per cent of baby boomers.
More than 60 per cent of Gen Y respondents, and 45 per cent of those in the Gen X cohort, said their financial situation was causing them stress.
Finder head of consumer research Graham Cooke said the difference was significant.
He said a small difference between generations could be expected but to have Gen Z experiencing financial stress at more than double the rate of baby boomers was notable.
“It seems younger Australians are more heavily impacted by the current cost of living crisis,” Mr Cooke told AAP.
He said it correlated directly with savings balances, with younger Australians unsurprisingly having much lower savings than older generations to draw on in times of financial hardship.
“The more savings Australians tend to have, the less the cost of living crisis is impacting them,” he said.
As many as 90 per cent of Gen Z respondents reported a reduction in spending compared with 59 per cent of baby boomers.
Groceries were the top cause of financial stress across all respondents, followed by housing costs – rents and mortgages – and then petrol and energy bills.
But with inflation likely past its peak, Mr Cooke said the cost of living crisis had also probably passed its most severe point.
“We might see inflation come down, then we might see some cash rate falls after the peaks,” he said.
“And so this might be the peak of difficulty and we might have calmer seas coming up.”
– AAP
