Generation gap: Older Aussies spend more as young tighten belts
CommBank iQ Report reveals how different age groups are coping with cost of living pressures
The latest CommBank iQ Cost of Living Insights Report reveals a widening spending gap between younger and older Australians, with those in their mid-to-late twenties reducing their spending more than any other age group.
While Australians over 65 continue to spend above the rate of inflation, particularly on travel and dining out, young adults have cut back on both essential and discretionary expenses. This trend underscores the significant lifestyle changes younger Australians are making to cope with rising costs.
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CommBank iQ Head of Innovation and Analytics, Wade Tubman, highlighted the tough choices faced by young Australians, including a notable drop in health insurance and utilities spending, suggesting many are moving back in with parents or into shared accommodations.
“Many Australians are having to allocate more of their wallet to essential living expenses, rather than other areas where they may prefer to direct their spending. The cost-of-living initiatives announced in the Federal Budget, for example the energy bill rebate, reflect the increased spending by Australians on essential items like energy,” Mr Tubman said.
Nationally, overall spending increased by 2.5 percent, with essentials like insurance and utilities seeing the highest growth. However, discretionary spending grew by only 1.4 percent, driven primarily by those over 60.
Regional areas showed more resilience, with a 3 percent annual increase in spending compared to 2.3% in metro areas. Queensland led the states in spending resilience, followed by the Australian Capital Territory and South Australia.
CommBank iQ, a joint venture between Commonwealth Bank of Australia and Quantium, provides insights using de-identified payments data from around 7 million CBA customers. This report highlights the diverse impacts of cost-of-living pressures across different age groups and regions.
For more details, read the full report: CommBank iQ Cost of Living Insights Report — May 2024.
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