Australians are reporting lower levels of life satisfaction than they did during the height of the Covid-19 pandemic, as years of financial pressure continue to take a toll on households.\u00a0<\/p>\n
New analysis by KPMG, based on Australian Bureau of Statistics data, found overall life satisfaction fell to 7.1 out of 10 in 2025.\u00a0<\/p>\n
That is below the 7.2 recorded in 2020 when lockdowns, border closures and widespread restrictions disrupted daily life across the country.\u00a0<\/p>\n
The result also marks a significant decline from 2019, when Australians reported an average life satisfaction score of 7.5.\u00a0<\/p>\n
KPMG Urban Economist Terry Rawnsley said the figures point to a prolonged decline in living standards rather than a temporary setback.\u00a0<\/p>\n
\u201cUnlike the pandemic lockdowns,\u00a0this\u00a0isn\u2019t\u00a0a temporary disruption,\u00a0it\u2019s\u00a0sustained pressure on living standards,\u201d he said.\u00a0<\/p>\n
\u201cReal wages have gone backwards, declining 4.1\u00a0per cent\u00a0between 2019 and 2025, while median household wealth has stalled at $700,000.\u00a0<\/p>\n
\u201cThese 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.\u201d\u00a0<\/p>\n
The findings come as more households report experiencing financial hardship.\u00a0<\/p>\n
One in five households now say they would be unable to raise $2,000 within a week if needed.\u00a0<\/p>\n
More than one quarter have faced at least one cash flow problem or have been forced to draw down savings, take on\u00a0additional\u00a0debt\u00a0or use other measures to stay afloat.\u00a0<\/p>\n
While there has been some improvement in the number of households struggling to pay bills, Mr Rawnsley said government energy rebates had\u00a0likely played\u00a0a role.\u00a0<\/p>\n
\u201cThere 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,\u201d Rawnsley said.\u00a0<\/p>\n
The Albanese government reduced its $300 energy bill rebates in 2024-25 down to a final $150 from July to December, before ending rebates on December 31, 2025.<\/p>\n
The pressure has been felt most acutely among younger Australians trying to enter the housing market.\u00a0<\/p>\n
People aged between 25 and 34 recorded the lowest life satisfaction score of any age group at 6.8, down sharply from 7.5 before the pandemic.\u00a0<\/p>\n
Mr Rawnsley said that the decline in life satisfaction among 25-34-year-olds reflects the reality of Australia\u2019s housing market, with this group facing high rents or mortgages at the same time when real incomes have gone backwards.\u00a0<\/p>\n
Australians aged between 45 and 54 also reported below-average satisfaction levels.\u00a0<\/p>\n
According to KPMG, many in that demographic were balancing the competing financial demands of supporting children while also caring for ageing parents.\u00a0<\/p>\n
Single-parent households continue to face some of the toughest financial conditions.\u00a0<\/p>\n
Almost half reported experiencing cash flow problems, while many reported multiple forms of financial stress at the same time.\u00a0<\/p>\n
\u201cFinancial stress is even more concerning for single parent households,\u201d Mr Rawnsley said.\u00a0<\/p>\n
\u201cAlmost half of single parent households report cash flow problems and 45\u00a0per cent\u00a0of those reporting four or more cash flow problems.\u201d\u00a0<\/p>\n
Not every age group has seen a decline.\u00a0<\/p>\n
Australians aged between 15 and 24 reported higher life satisfaction than during the pandemic years, with scores rising from 6.9 to 7.2.\u00a0<\/p>\n
Mr Rawnsley said younger people may be\u00a0benefiting\u00a0from the return of normal social and educational experiences after missing key milestones during lockdowns.\u00a0<\/p>\n
Australians aged 65 and over\u00a0remained\u00a0the most satisfied group, recording a score of 7.7, unchanged from 2019.\u00a0<\/p>\n
KPMG said higher rates of home ownership, retirement savings and pension support may have shielded many older Australians from some of the financial pressures affecting younger generations.\u00a0<\/p>\n
\u201cThis relative stability may reflect lower exposure to labour market pressures, higher rates of home ownership, and the cushioning effects of superannuation and government pensions,\u201d Rawnsley said.\u00a0<\/p>\n