ANZ Roy Morgan Financial Wellbeing Indicator – Quarterly Update September 2021

FINANCIAL WELLBEING OVERVIEW

Financial wellbeing continues to be an important measure of how people are faring in their financial lives and the impact of the pandemic on their livelihoods. The ANZ Roy Morgan Financial Wellbeing Indicator (FWBI) is reported as a 12-month rolling average, with quarterly updates showing changes in aspects of financial wellbeing across locations and for a range of segments in the community (see bluenotes.anz.com/financialwellbeing for updates).

This update compares 12 months of post COVID-19 financial wellbeing data to June 2021 with the pre COVID-19 period (12 months to March 2020). The June quarter was a period of optimism in Australia, with low COVID-19 infection numbers and minimal restrictions in April and May 2021. This is reflected in Australians feeling more positive about their financial situation at the time. However, these feelings were likely short-lived with a new wave of infections and restrictions in Australia’s two most populous cities by the end of the quarter.

Indicator

• The ANZ Roy Morgan Financial Wellbeing Indicator shows that the financial wellbeing of Australians declined 4.4% from 60.7 (as a score out of 100) in the 12 months to March 2020 (pre-COVID-19) to 58.0 in the 12 months to June 2021 (Figure 1 and Table 1).
• The indicator declined sharply in the June 2020 quarter immediately after the COVID-19 pandemic took hold and the initial Australia-wide lockdown began. Since then, there has been an upward trend in financial wellbeing on a quarterly basis. The spot score rose to a post COVID-19 high of 59.8 in May 2021 however fell 1.1 points to 58.7 in June 2021, perhaps a leading indicator of the impact of a new round of lockdowns in Victoria and NSW.
• While all components of financial wellbeing declined post COVID-19, the biggest decline compared to the pre COVID-19 period was in ‘Feeling Comfortable’ about one’s current and future situation, down 6.3%, from 56.0 (out of 100) in the 12 months to March 2020 to 52.5 (out of 100) in the 12 months to June 2021 (Table 1). The more subjective measure of ‘Feeling Comfortable’ has strongly influenced the overall financial wellbeing indicator score throughout the pandemic, declining sharply in the first quarter post COVID-19 and recovering ever since. This trend has slightly flattened in the most recent quarter to June 2021 (Figure 2).
• ‘Meeting Everyday Commitments’ has also declined, down 5.6% since the 12 months to March 2020, from 73.0 (out of 100) to 68.9 (out of 100) in the 12 months to June 2021. ‘Meeting Everyday Commitments’ had declined strongly in the first pandemic quarter (June 2020), remained fairly flat for the following two quarters and started to show some recovery in the March 2021 and June 2021 quarters as positive sentiment returned (Figure 2). The ongoing trend in this dimension will depend on the impact of the current lengthy COVID-19 outbreaks and lockdowns particularly in NSW and Victoria and the reintroduction government support for those negatively affected after the initial support package ended in March 2021.
• ‘Resilience for the Future’ – the ability to cope with financial setbacks – remained fairly steady, declining by only 0.8% for the 12 months to June 2021 (52.8 out of 100) compared to 12 months to March 2020 (53.2 out of 100) (Table 1). Institutional support in response to the pandemic and deferred consumption have both continued to keep deposit balances healthier than anticipated.

Click to download a PDF of the ANZ Roy Morgan Financial Wellbeing Indicator - Quarterly Update for September 2021.