Australians are tightening their belts and leaning harder on family support as financial stress climbs, yet the determination to buy property remains firmly in place.
National Australia Bank’s latest Australian Wellbeing Survey for the December 2025 quarter shows overall life satisfaction slipping, with rising financial stress, shifting rate expectations, and changing debt patterns reshaping household behaviour.
Wellbeing retreats after brief recovery
NAB’s Australian Wellbeing Index fell sharply to 62.8 in the December quarter, down from a two‑year high of 64.2 in September and below the long‑term survey average of 64.3.
The index, which aggregates how Australians rate their happiness, life satisfaction, sense of life worth, and anxiety on a 0–100 scale, had been recovering through mid‑2025 as households adjusted to earlier cost‑of‑living shocks and signs that rates might have peaked.
Life worth slipped to 66.0 (from a 68.1 average), happiness to 64.8 (from 66.3), and life satisfaction to 63.6 (from 65.1).
Meanwhile, anxiety rose, with the “not anxious yesterday” measure dropping to 56.7, below its long‑term average of 57.7, signalling a broader step‑up in day‑to‑day concern.
The deterioration was widespread, with wellbeing down in 38 of the 44 demographic groups covered in the survey.
Financial stress climbs, but deterioration slows
Alongside the softer wellbeing scores, NAB’s Household Financial Stress Index rose for a second straight quarter to 47.2 in December, up from 46.3, and above its survey average of 45.1.
NAB linked the upswing in stress to shifting interest rate expectations, with earlier hopes of cuts now “a distant memory” for many consumers.
Heightened concern about job security, which now sits at levels last seen in the early months of the pandemic, also added to pressure around bills and mortgages, according to the bank.
Yet the survey suggested that the worst of the financial deterioration may be behind many households.
The net share of Australians reporting they were worse off than a year ago improved to ‑15 per cent in December, from ‑17 per cent in September and ‑26 per cent a year earlier, indicating that the pace of decline was easing.
‘Pressure and determination’ define the market mood
Commenting on the findings, Adam Brown, executive, broker distribution at NAB, said the data mirrored what brokers were hearing from customers every day.
“The latest NAB data reflects what many brokers are already seeing with their customers – a real mix of pressure and determination,” Brown said.
“Australians are working hard to get their finances in order, saving more and spending more carefully, but many are also navigating genuine financial stress.”
Brown said the survey underscored the importance of trusted guidance as households reassessed borrowing capacity and repayment strategies.
“Brokers play an important role in helping customers make sense of where they stand and what is achievable,” he said.
Despite the softer wellbeing readings, Brown said the fundamental ambition to own property remains undimmed.
“The aspiration for home ownership is clearly there – and so is the determination to get there,” he said.
Family support rises as saving intentions soften
One of the most striking themes in the survey was the growing role of the ‘Bank of Mum and Dad’ – and increasingly, grandparents – in propping up household finances.
Around one in seven households reported providing financial assistance to non‑dependent children or grandchildren – a share which rises to about one in five among over‑50s and higher‑income households.
Contributions towards loan repayments ticked higher, with 10 per cent providing help on the front, up from 8 per cent.
At the same time, savings behaviour is under pressure, with three‑quarters (75 per cent) of Australians saying they were attempting to save, down from 77 per cent, and below the long‑run average of 76 per cent.
Debt mix shifts
On the liability side, the survey showed a slow and uneven reshaping of household debt.
Slightly fewer Australians reported a net decrease in their overall household debt levels in December (‑5 per cent) than in September (‑6 per cent), but the share remains better than at the same time last year (‑3 per cent).
Credit cards remain the most common form of debt, held by 35 per cent of respondents, followed by home loans (29 per cent), buy now, pay later (BNPL) arrangements (20 per cent), personal loans (15 per cent), loans from family or friends (13 per cent), investment loans (8 per cent), and payday loans (6 per cent).
Across most of these categories, average outstanding balances edged lower.
Home loans fell to about $328,601 from $358,221, while investment loans decreased to around $211,772 from $288,961.
The survey found that home loans remained the dominant exposure in dollar terms, with average balances now above $350,000 and peaking among 30–49‑year‑olds (about $440,586) and higher‑income households (around $413,769).
These same groups also carry the largest investment loan balances, with averages of roughly $373,365 and $359,084, respectively.
[Related: Borrowers pivot to savings as rate pressures rebuild]
