Australian consumers ‘very highly’ stressed over retirement funding: NAB

The number of Australian consumers feeling “very highly” stressed has crept up amid growing concern over the ability to fund retirement, which has risen to a seven-year high.

National Australia Bank on Thursday revealed its consumer stress index rose to an 18-month high in the March quarter, with inflation continuing to add to already high living costs.

Around three in 10 Australians reported “very high” cost of living stress, rising to more than 40 per cent among those in the lowest income group.

Most consumers continue to cut back on eating out at restaurants (54 per cent), treats (50 per cent), entertainment (48 per cent), car journeys to save petrol (42 per cent), travel plans (42 per cent) and food delivery services (40 per cent).

Consumers reported saving most by cancelling or delaying a major household purchase such as TV or washing machine, cancelling, delaying or making more modest holiday plans and cancelling or cutting back on private school fees and private tutors.

Almost six in 10 Australians used savings for daily living expenses, while nearly 50 per cent put them into offset accounts.

Across Australia, consumer stress remains highest — and increased further — in Victoria, followed by NSW and the ACT. WA and Queensland were the only States to report lower stress.

The NAB survey pre-dates recent rapid shifts in US government policies, which NAB said would clearly add to concerns of an already stressed consumer.

“The path of consumer sentiment — and more importantly how they respond — from here remains highly uncertain,” the survey said.

“In our view the challenges posed by US trade policy will require a more pre-emptive policy response by the (Reserve Bank).”

But NAB said there were “clear green shoots” in the survey. The first interest rate cut in four years had lifted sentiment among some consumers, although further cuts will be clearly needed.

NAB the same day also revealed businesses reported softer conditions to start the year, with WA posting the biggest decline in the March quarter. It was followed by Queensland.

By industry, conditions fell most in mining, transport and utilities, financial, property and business services and wholesale. Retail conditions rebounded but remained in negative territory.

The retail industry also recorded a significant increase in confidence and is now almost back to positive territory.

The share of businesses reporting labour was a significant constraint on output fell from 34 per cent to 29 per cent.

This is the first time since September 2021 this measure has come in below 30 per cent.