Australians are turning to their employers for guidance as personal financial stress spikes, new research reveals.

The Gallagher Employee Financial Confidence Report shows the major causes of financial stress for Australian employees include unexpected costs, insufficient savings and rising living expenses.

Financial stress does not discriminate, with 70 per cent of employees admitting to worrying about or spending time each week dealing with money while at work, irrespective of their position or level of income. This is costing employers more than $47 billion each year.

Despite a tight labour market and an increase in the average net worth of Australians, the average disposable household income has only increased $44 per week over the last decade1 , driving these ‘here and now’ money concerns.

Graham Campbell, CEO of Gallagher’s Employee Benefits and HR Consulting Division in Australia, said the economic environment has changed and working Australians are under greater financial pressure.

Australians who have been impacted by the bushfire crisis will feel this more acutely and those who are not affected will be more conscious of their financial preparedness for an emergency. As the ‘Big 5 costs of living’, which include housing, energy bills, private health insurance, petrol and transport, continue to put pressure on Australians, there is an opportunity for businesses to do more.

“In a slowing economy, employers may not be able to increase wages but they can look at financial wellbeing support and education to help alleviate the burden for workers. Employees of all ages and income levels face challenges that require better tools, programs and education.

“A fruit bowl is nice as a company benefit, but if you want to make a real change to the lives of employees, supporting financial health not only improves wellbeing but also moves the dial on employee engagement and productivity, and acts as a catalyst for business growth and profitability, so they can face their future with confidence,” Campbell said.

Despite ASIC spending around $10 million2 on financial literacy programs, financial literacy remains at a low. With trust in banks critically low, approximately one in four Australian corporates are already propping up the shortfall with financial education programs as part of their employee benefits programs.

While more than half (54%) of Australian employees have moderate to extreme financial stress about superannuation and retirement, 68 per cent place high to extreme importance on subsidised private health insurance.

In the highly scrutinised home loan market, mortgages were also on employees’ minds, with people in NSW, VIC, ACT and QLD citing worry about being able to afford to enter the mortgage market as a greater concern than paying their mortgage.

Other key findings

  • More than one in four employees (28%) spend two or more hours per week worrying about or managing their finances at work. More than half of those surveyed (58%) had low levels of financial confidence, but 74 per cent said they do not seek any professional assistance when making personal financial decisions.
  • Across the nation, just four per cent of employees surveyed said that they were extremely confident.
  • Employees in Queensland are the most stressed about their personal finances, with one in five Queenslanders extremely worried about unexpected costs and expenses, and 15 per cent of employees spending four hours or more of their working week worrying about money.
  • In New South Wales employees are as equally concerned about unexpected costs and expenses (12%), as they are with entering the mortgage market (12%). This was closely followed by worry about savings (11%).

1 Australian Bureau of Statistics, “6523.0 – Household Income and Wealth, Australia, 2017-18,” July 2019 

2 https://www.smh.com.au/money/planning-and-budgeting/ato-ramps-up-financial-literacy-programs-in-schools-20190902-p52n7b.html