The findings are based on a survey of more than 2,000 respondents, conducted between mid and late June 2022, and extrapolated using wider Australian Bureau of Statistics (ABS) data.
Since the beginning of the pandemic in 2020, the number of those suffering severe or moderate financial stress has increased dramatically.
The data shows 953,000 workers are severely financially distressed, while 2.01 million are moderately financially distressed.
Of those, the 18-29 age group is the most affected by financial stress (31%) compared to the 55+ age group who are least impacted (12%).
According to AMP, financial stress costs the economy $66.8 billion a year due to lost productivity, lack of motivation, and employee distraction.
This figure is double the rate found from the same survey conducted in 2020.
Stephen Owen, AMP’s General Manager of Member Engagement, said concerns about meeting expenses and the impact of higher interest rates are major factors contributing to financial stress.
“It’s no surprise we’re more financially stressed than ever,” Mr Owen said.
“Following an emotionally unsettling two to three years with Covid, we’re now facing rising interest rates, general cost of living pressures, a property downturn and jittery investment markets.
“What’s particularly concerning is the impact on women, single-parents and younger Australians, where stress levels have increased the most.”
The report found 27% of women and 25% of single-parents aged 30-44 are severely or moderately financially stressed, up from 19% and 13% respectively in 2020.
There is a silver lining
The research indicates the Covid crisis caused many workers to reassess their finances and set goals for the future.
Workers considering setting financial goals has doubled from 17% to 34%.
Additionally, one in two employees indicate they are likely to seek professional help in the next 12 months.
“There are reasons to be optimistic – unemployment is at historic lows, our economy is in relatively robust shape, despite inflationary pressures, and new flexible ways of working are seemingly here to stay, easing the logistical pressure cooker for many families and reducing household expenditure,” Mr Owen said.
“Importantly, the rising stress has also been a catalyst for many Australians to engage with their finances – more of us are recognising that simple steps such as setting financial goals, establishing a budget and accessing credible online educational resources can have a positive impact on financial peace of mind.
“These actions are the foundations for financial wellbeing, irrespective of income and age.”
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