Shocks and safety nets: financial wellbeing during the COVID-19 crisis

We use ANZ's Financial Wellbeing Indicator, which draws on multiple questions in the continuous Roy Morgan Single Source survey. The Indicator brings together three dimensions based on Kempson and colleagues’ (2017) model of financial wellbeing. These include the ability to meet everyday commitments, feeling comfortable about one’s financial situation and resilience to financial shocks. For most people, the COVID crisis led to a decline in financial wellbeing, driven by a sharp fall in the Feeling Comfortable dimension. People with low incomes, particularly those in the workforce, faced more serious declines. For example, low-income workers showed a 21% decline in ability to Meet Commitments from the pre-COVID period to the September 2020 quarter. On the other hand, COVID-19 responses made it easier for those relying on income support to buy essentials and pay bills on time: Our findings suggest that harmful impacts from the crisis were less severe where people had access to government support as well as their own savings or other resources. Real, widespread recovery will require not only adequate social security that allows resilience but also investment in full employment and social infrastructure such as affordable housing. This report is part of the Financial Lives in Uncertain Times project. The research was made possible by the generous support of ANZ through the ANZ Tony Nicholson Fellowship and the provision under licence of Roy Morgan Single Source Survey data