Younger Australians have been most affected by the economic crisis of COVID-19, with almost half losing their jobs or having their pay or work hours reduced.
New research from ANZ and Roy Morgan have shown that 44 per cent of those aged between 14 and 39 were stood down, or had their pay or work hours reduced between March and May 2020.
The ANZ Roy Morgan Financial Wellbeing Indicator has also revealed that 39 per cent of young families said their employment status and pay had been affected, compared with 27.3 per cent of those 40 and older.
According to the findings of the survey that informed the research report, more than a third of young Australian adults and families said they had less than a month’s income in savings to fall back on before the crisis.
The average income young adults had saved before the pandemic was 2.4 months, and for young families, it was 2.8 months.
This compared with old families, who had saved for 6.5 months.
The report states that younger life stages such as young adults and young families were more likely to have suffered negative employment impacts.
“Young adults and young families who were ‘getting by’ in March 2020 was immediately vulnerable to the impacts of COVID-19 due to their low deposit levels (less than one month’s income in deposits) resulting in less of a savings buffer to fall back on in the event of a crisis,” the report said.
Over half of all young adults, or 54.0 per cent, and 43.1 per cent of young families who were “getting by” in March 2020 experienced negative effects on their work status post-COVID-19 months of April and May.
The younger demographic who were more likely to hold lower savings balances were also more likely to have been affected by the economic impacts of COVID-19 in April and May, with 43.7 per cent of young adults and 35.6 per cent of young families impacted by negative employment consequences.
When looking at different life stage segments, the survey found that the level of financial wellbeing increases with age.
A higher proportion of retired people were in the “no worries” segment when asked about how they felt about their financial wellbeing, with 31.2 per cent in the combined months of April and May 2020. This compared with only 12.2 per cent young adults.
Families were more likely to be either “struggling” and “getting by”, with 40.3 per cent of young families and 39.4 per cent of older families falling into these categories, respectively.
Overall, the indicator showed a 6.9 per cent in financial wellbeing across the board, which was the largest record fall in the spot result, and was almost on par with the cyclical low in May 2014.
The report has pointed out that with government support still currently in place, the full impact of COVID-19 on employment is not yet evident.
“It is unclear how many of those people will not resume employment once government supports are lifted,” it said.
While the majority of the negative employment impacts in April and May were either being stood down or reducing hours and pay, only a small proportion of employees were made redundant, the research found.
Commenting on the findings in the report, ANZ deputy CEO Alexis George said: “As a group, young people are less likely to have been actively saving before the pandemic began, and many of them have also had their work hours or income reduced, so it has been incredibly tough for them.”
“We’re continuing to offer a support package for customers who are experiencing ongoing financial difficulty due to COVID-19. We also have a range of tools available to help people with budgeting and saving – behaviors that contribute to higher financial wellbeing.”
The report, which assesses financial behaviors, is based on the Roy Morgan Single Source survey of 50,000 Australians annually.