Financial pressures make Aussies less satisfied with life than during lockdowns, study finds

Growing financial pressure has led Australians to be less satisfied with life than during lockdowns at the height of the COVID-19 pandemic, according to a study by KPMG.

The research, which analyses ABS data, has found that overall life satisfaction fell to 7.1 in 2025 – down from 7.2 in 2020 and a notable fall from 7.5 in 2019.

The rating, which ranks people’ perception of satisfaction on a scale of one to 10, marks a broader easing from 7.6 more than a decade ago in 2014.

KPMG urban economist Terry Rawnsley says the fall in life satisfaction coincides with deteriorating household financial conditions.  

“Unlike the pandemic lockdowns this isn’t a temporary disruption, it’s sustained pressure on living standards,” says Rawnsley.

“Real wages have gone backwards, declining 4.1 per cent between 2019 and 2025, while median household wealth has stalled at $700,000.  

“These factors have left many average Australians in a precarious financial position for the better part of five years and is undoubtedly affecting how they feel about their lives.”

The KPMG research says more Australians than ever are currently reporting severe financial stress with 21.7 per cent of households now unable to raise $2,000 within a week, up from 19.5 per cent in 2019.  

More than a quarter have experienced at least one cash flow problem or engaged in "dissaving" actions such as drawing down savings or increasing debt.  

“There has been a slight improvement in the share of households reporting difficulty paying bills compared to 2019, likely due to state and federal energy bill subsidies,” says Rawnsley.

“Financial stress is even more concerning for single parent households.

“Almost half of single parent households report cash flow problems and 45 per cent of those reporting four or more cash flow problems.” 

Those aged 25 to 34 recorded the lowest life satisfaction at 6.8, down from 7.5 in 2019, representing the largest fall of any group.  

“The decline in life satisfaction among 25-34-year-olds reflects the reality of Australia’s housing market,” says Rawnsley.

“This is a group facing high rents or large mortgages at the same time as real incomes have gone backwards.”

Australians aged 45-54 also reported comparatively low life satisfaction at 6.9.  

“The ‘sandwich’ generation are starting to feel significant financial pressures caring for both ageing parents and trying to support their children whose ability to generate their own wealth has flatlined,” says Rawnsley.

“Improving life satisfaction is not something that can be fixed overnight.

“It will require a sustained focus on factors closely shaping how Australians experience the economy, including real incomes, housing affordability and financial resilience.”

Notably, younger Australians aged 15-24 presented the only bright spot in the research with life satisfaction for this cohort rebounding from 6.9 during the pandemic to 7.2 today.