Growing financial stress is taking a toll on Australians, leading to lower life satisfaction compared to the peak of the COVID-19 pandemic. A recent study reveals that many are struggling more now than during the toughest lockdowns, highlighting a concerning trend in everyday life.

Life Satisfaction Declines Post-Pandemic

According to research conducted by KPMG, life satisfaction in Australia has dropped to 7.1 out of 10 in 2025. This is a decline from 7.2 in 2020 and 7.5 in 2019. The rating summarizes how people feel about their lives on a scale of one to ten, with the current number showing that satisfaction has lowered significantly over the past decade. Back in 2014, the happiness level was even higher, at 7.6.

Terry Rawnsley, an urban economist at KPMG, explains that this decline is related to worsening household financial situations. Unlike the temporary stress experienced during pandemic lockdowns, the current pressures are long-lasting and focused on everyday living standards. Rawnsley notes a marked decline in real wages, which have fallen by 4.1% from 2019 to 2025. Meanwhile, the median household wealth has stagnated at approximately $700,000. These factors leave many average Australians feeling financially unstable, impacting their overall happiness.

Growing Financial Stress Among Households

The KPMG report highlights that financial stress is more prevalent than ever, with 21.7% of households now unable to easily raise $2,000 within a week, up from 19.5% in 2019. Additionally, over a quarter of households reported facing cash flow issues or engaging in “dissaving,” which includes spending savings or taking on debt.

While there has been a slight improvement since 2019 in the number of households struggling to pay bills, likely due to government energy bill subsidies, the situation remains dire for many. Single-parent households are particularly affected, with nearly half reporting financial difficulties, and over 45% noting multiple cash flow challenges.

Impact on Younger Generations

Among various age groups, younger Australians aged 25 to 34 have reported the steepest drop in life satisfaction. Their satisfaction level fell to 6.8, down from 7.5 in 2019. This demographic struggles significantly with high rent and mortgage costs while their incomes remain stagnant, making it challenging to adapt to the current housing market.

The 45 to 54 age group, often referred to as the “sandwich” generation, is also feeling the heat. This group balances the demands of caring for aging parents while supporting their children financially, leading to a drop in their life satisfaction to 6.9.

Interestingly, not all is bleak. Younger Australians aged 15 to 24 have experienced a rebound in their life satisfaction, which rose from 6.9 during the pandemic to 7.2 currently. This suggests that while older groups grapple with financial pressures, younger individuals may be coping better or finding more reasons to feel fulfilled.

What this means for you

The declines in life satisfaction reflect deeper issues in the economy that can affect every Australian, especially when it comes to finances. If you’re filling out financial documents like loan applications or credit agreements, make sure you fully understand the terms. If you ever need to review these documents, legal-document-to-plain-english-translator/”>AI legalese decoder can help translate them into plain English in seconds, making it easier for you to navigate your financial responsibilities.

Source: https://www.businessnewsaustralia.com/articles/financial-pressures-make-aussies-less-satisfied-with-life-than-during-pandemic-lockdowns-study-finds.html