Welcome to the Fear and Greed business interview. I'm Sean Aylmer. There are a few parts of our lives that haven't been hit by the cost of living crisis. Mortgage payments, rent, power bills, food, insurance, petrol, you name it, it seems to be getting more expensive. And all of that has a real impact on consumer confidence and spending. Today, we're getting an insight into where the pressure points are for consumers and the effect it's having on households. Kate Browne is the Head of Research and Insights at Compare Club, which is a great supporter of this podcast. Kate, welcome to Fear and Greed.

Welcome to the Fear and Greed business interview. I'm Sean Aylmer. There are a few parts of our lives that haven't been hit by the cost of living crisis. Mortgage payments, rent, power bills, food, insurance, petrol, you name it, it seems to be getting more expensive. And all of that has a real impact on consumer confidence and spending. Today, we're getting an insight into where the pressure points are for consumers and the effect it's having on households. Kate Browne is the Head of Research and Insights at Compare Club, which is a great supporter of this podcast. Kate, welcome to Fear and Greed.

Thanks for having me.

Thanks for having me.

So you've released Compare Club's Bill Stress Index, how stressed are we, Kate?

So you've released Compare Club's Bill Stress Index, how stressed are we, Kate?

Yeah, look, Sean, we did this research last year and it was really interesting to run it again at the same time this year. I would say, top line, we are coping. But we are definitely more stressed than we were even six months ago.

Yeah, look, Sean, we did this research last year and it was really interesting to run it again at the same time this year. I would say, top line, we are coping. But we are definitely more stressed than we were even six months ago.

Why?

Why?

What we're seeing is certain demographics are really under the pump, and they are the ones where their stress levels are just rising really sharply. It will probably be no surprise to anyone, families are one of the most stressed groups, and people that we're calling upper middle class salaries. So these are people that earn, in their household, between $ 70,000 to $125,000 each. They are sitting at... 52% of them are saying they're highly stressed. Families who are all... We're rounding up between 35 and 44, so this is people probably with younger children. 62% of them are stressed. The things that are stressing them out is energy prices, mortgage, and rent for the younger families. And for the upper middle class, energy, mortgage, and then general insurances coming in too because we've seen some big price rises there.

What we're seeing is certain demographics are really under the pump, and they are the ones where their stress levels are just rising really sharply. It will probably be no surprise to anyone, families are one of the most stressed groups, and people that we're calling upper middle class salaries. So these are people that earn, in their household, between $ 70,000 to $125,000 each. They are sitting at... 52% of them are saying they're highly stressed. Families who are all... We're rounding up between 35 and 44, so this is people probably with younger children. 62% of them are stressed. The things that are stressing them out is energy prices, mortgage, and rent for the younger families. And for the upper middle class, energy, mortgage, and then general insurances coming in too because we've seen some big price rises there.

Yeah, so the upper middle salaries was really interesting. You said 52% are highly stressed. And just the fact that general insurance is an issue for them, maybe it's the expensive houses or the expensive cars or something like that. Were you surprised by that, the general insurance?

Yeah, so the upper middle salaries was really interesting. You said 52% are highly stressed. And just the fact that general insurance is an issue for them, maybe it's the expensive houses or the expensive cars or something like that. Were you surprised by that, the general insurance?

I was surprised it got in the mix, compared to some of the greatest hits that people roll out, generally around bill stress, including things like groceries or everyday expenses. What is really interesting around insurance is we are seeing insurance costs go up and that is across the board. We're seeing it in car insurance. We're seeing it in home and contents insurance. We've had some pretty major weather events over the last few years, that's really helped inform some of those price rises. And, potentially, these are people, well certainly with that demographic, a lot of them do have a mortgage, so they're, pardon my French, insured up the wazoo, potentially. They're the ones who are going to have home and contents, the car, maybe two cars. That stuff's going to start biting pretty hard.

I was surprised it got in the mix, compared to some of the greatest hits that people roll out, generally around bill stress, including things like groceries or everyday expenses. What is really interesting around insurance is we are seeing insurance costs go up and that is across the board. We're seeing it in car insurance. We're seeing it in home and contents insurance. We've had some pretty major weather events over the last few years, that's really helped inform some of those price rises. And, potentially, these are people, well certainly with that demographic, a lot of them do have a mortgage, so they're, pardon my French, insured up the wazoo, potentially. They're the ones who are going to have home and contents, the car, maybe two cars. That stuff's going to start biting pretty hard.

Nothing better than being insured up the wazoo, Kate, I'd say it's perfect. Anyway-

Nothing better than being insured up the wazoo, Kate, I'd say it's perfect. Anyway-

I like to ensure that every time.

I like to ensure that every time.

That's right. I do know QBE, last week, came out and I think they said, in this region, Australia, New Zealand, their premiums were up 12 and a quarter percent. IAG were out, last month I think it was, basically saying 10% plus premium increases. It's getting very expensive to insure stuff.

That's right. I do know QBE, last week, came out and I think they said, in this region, Australia, New Zealand, their premiums were up 12 and a quarter percent. IAG were out, last month I think it was, basically saying 10% plus premium increases. It's getting very expensive to insure stuff.

It is. And I think something I've found really interesting since I've been working this space is how much climate change is informing the cost of our insurance. Even car insurance, the sheer amount of cars that were lost during major weather events has actually informed the kind of prices, premiums, we're now paying on all our car insurance. And it is rising very steeply. It's not tracking by 1% or 2%. We're seeing some big jumps. And people are getting quite a shock.

It is. And I think something I've found really interesting since I've been working this space is how much climate change is informing the cost of our insurance. Even car insurance, the sheer amount of cars that were lost during major weather events has actually informed the kind of prices, premiums, we're now paying on all our car insurance. And it is rising very steeply. It's not tracking by 1% or 2%. We're seeing some big jumps. And people are getting quite a shock.

So insurance, obviously we know about petrol, and while it goes up and down, it's still staying at fairly high levels. Certain foods remain very expensive. Energy is a big one. And then, on top of that, you have interest rates and mortgage stress. I suppose this all has a compounding effect when you have so many things at once.

So insurance, obviously we know about petrol, and while it goes up and down, it's still staying at fairly high levels. Certain foods remain very expensive. Energy is a big one. And then, on top of that, you have interest rates and mortgage stress. I suppose this all has a compounding effect when you have so many things at once.

You've just painted a really good picture there, Sean. There's so many things. And even for people that don't have a mortgage, rent is rising. I spoke to a friend last night whose rent is going up 25%. Her apartment hasn't grown an extra room or a plunge pool. We are seeing this across the board. So even if you don't have all those larger costs in place necessarily, you are getting hit with all of them. Energy is really starting to bite. And energy, just universally, is now causing a huge stress across the board for people because those costs have risen very sharply.

You've just painted a really good picture there, Sean. There's so many things. And even for people that don't have a mortgage, rent is rising. I spoke to a friend last night whose rent is going up 25%. Her apartment hasn't grown an extra room or a plunge pool. We are seeing this across the board. So even if you don't have all those larger costs in place necessarily, you are getting hit with all of them. Energy is really starting to bite. And energy, just universally, is now causing a huge stress across the board for people because those costs have risen very sharply.

Stay with me, Kate, we'll be back in a minute. I'm speaking to Kate Browne, Head of Research and Insights at Compare Club. Now, you've got data on just how much of our wages are going to household bills. What I think's interesting about that, and I want you to take me through that... But not that long ago, Michele Bullock, the Reserve Bank Governor, said, " Look, we're not that stressed actually because people have a job. And, overall, in aggregate, the economy, people have work. And if that's the case, it does take some stress off the table." I'm just interested in how that compares because your research doesn't really say that.

Stay with me, Kate, we'll be back in a minute. I'm speaking to Kate Browne, Head of Research and Insights at Compare Club. Now, you've got data on just how much of our wages are going to household bills. What I think's interesting about that, and I want you to take me through that... But not that long ago, Michele Bullock, the Reserve Bank Governor, said, " Look, we're not that stressed actually because people have a job. And, overall, in aggregate, the economy, people have work. And if that's the case, it does take some stress off the table." I'm just interested in how that compares because your research doesn't really say that.

No, our research has laid it out pretty clearly. 30.39% of people saying between 50% to 75% of their wages are now going on household bills. We have 27% saying between a third and a half. And we have 23% saying between a fifth and a third. This is high. When we look at things like housing stress, the old rule would be never more than 30% to be spent on your housing, whether it's rent or a mortgage. Those rules are gone. This is a huge amount. And to have over 30% of people sitting at 50% to 75% of their wages going on household bills is pretty critical. It's not a good look.

No, our research has laid it out pretty clearly. 30.39% of people saying between 50% to 75% of their wages are now going on household bills. We have 27% saying between a third and a half. And we have 23% saying between a fifth and a third. This is high. When we look at things like housing stress, the old rule would be never more than 30% to be spent on your housing, whether it's rent or a mortgage. Those rules are gone. This is a huge amount. And to have over 30% of people sitting at 50% to 75% of their wages going on household bills is pretty critical. It's not a good look.

Okay. Now, looking at the research, I thought it was interesting that even though we are more stressed, we're more confident and proactive in the way we manage our finances. It almost suggests that we're doing something about the fact that we're more stressed. Fewer people are using credit to pay bills as well. Did all that surprise you?

Okay. Now, looking at the research, I thought it was interesting that even though we are more stressed, we're more confident and proactive in the way we manage our finances. It almost suggests that we're doing something about the fact that we're more stressed. Fewer people are using credit to pay bills as well. Did all that surprise you?

This was really surprising to me. But, also, in the space that I work in, actually made me quite happy because I'm always banging on about financial literacy, taking control of your finances, being more proactive. I've worked in this space for quite some time now and this is a big change. My theory is a lot of people who sat back a few years ago when times were good and interest rates were low, they knew they could swap or get a better deal, but it wasn't so pressing that they do anything about it. It was quite tricky to get people motivated to do that. Not only have we seen people engaging less with credit products, 32% less is massive, that confidence is really interesting. And I see that reflected across the board. I see it reflected in the conversations I'm hearing in my own circles. I've noticed how much more prevalent discussions about finances are on places like social media. On TikTok, there are so many finfluencers now who talk about this kind of thing that I think it's definitely become part of the national conversation. And as a result, people are feeling more confident. I don't think I heard a lot of people talk about refinancing, the way that people are talking about it now, five or six years ago. And I would say we don't have a choice, so people have had to step up and start learning and doing.

This was really surprising to me. But, also, in the space that I work in, actually made me quite happy because I'm always banging on about financial literacy, taking control of your finances, being more proactive. I've worked in this space for quite some time now and this is a big change. My theory is a lot of people who sat back a few years ago when times were good and interest rates were low, they knew they could swap or get a better deal, but it wasn't so pressing that they do anything about it. It was quite tricky to get people motivated to do that. Not only have we seen people engaging less with credit products, 32% less is massive, that confidence is really interesting. And I see that reflected across the board. I see it reflected in the conversations I'm hearing in my own circles. I've noticed how much more prevalent discussions about finances are on places like social media. On TikTok, there are so many finfluencers now who talk about this kind of thing that I think it's definitely become part of the national conversation. And as a result, people are feeling more confident. I don't think I heard a lot of people talk about refinancing, the way that people are talking about it now, five or six years ago. And I would say we don't have a choice, so people have had to step up and start learning and doing.

A far more interesting conversation at the barbecue, talking about insurance and mortgages and things like that. I think not. What about things like phone plans, those types of things, do they come into the mix?

A far more interesting conversation at the barbecue, talking about insurance and mortgages and things like that. I think not. What about things like phone plans, those types of things, do they come into the mix?

Absolutely. These things are just... We consider things like phone plans and NBN, that's just all utilities now. You can't really function without those things. We are seeing more people shop around in that space as well, and particularly with broadband. Because NBN's putting its prices up in January and ACCC's come out and said everyone needs to shop around which is always... I find that a bit of an infuriating statement because if " shopping around" was that easy, everyone would do it. But to know what to look for and how to do it, that's the pointy bit about all these things. So, again, those prices are creeping up too. But we are seeing definitely much more assertive consumers now in Australia than we would've a few years ago.

Absolutely. These things are just... We consider things like phone plans and NBN, that's just all utilities now. You can't really function without those things. We are seeing more people shop around in that space as well, and particularly with broadband. Because NBN's putting its prices up in January and ACCC's come out and said everyone needs to shop around which is always... I find that a bit of an infuriating statement because if " shopping around" was that easy, everyone would do it. But to know what to look for and how to do it, that's the pointy bit about all these things. So, again, those prices are creeping up too. But we are seeing definitely much more assertive consumers now in Australia than we would've a few years ago.

Okay. So we've talked around energy and utilities thus far, but let's end with utilities. Because that really is where the big stress point is, isn't it?

Okay. So we've talked around energy and utilities thus far, but let's end with utilities. Because that really is where the big stress point is, isn't it?

Yeah. This is what was probably the biggest change that we've seen in a year, and indeed in six months when we last checked in with our research panel. It is the biggest stress across the board. It is bigger than mortgage, rent, general insurance, health insurance, credit cards, car loans, other loans, life insurance. This is the doozy. And those sharp increases have really started to bite with people, coupled with, I spoke before about extreme weather events. We're rolling into what's predicted to be a very extreme summer. I think a lot of people who aren't feeling stressed by energy bills are going to be really shocked this summer when we roll in and we're going to have a lot of use. It is interesting that it has changed that much. I guess the other thing is, no matter where you're at in life, everyone has to use energy and that is the one you can't really escape. And it's a space where there's a lot of confusion. There's a lot of difference between all the states about what you can access, how you can shop around. But I think a lot of people have seen their bills rise exponentially. And, again, they're engaging. I was told by some of our staff here that talk about utilities and energy, previously, a lot of people that called in couldn't even tell people which energy provider they were with. That's how unengaged they were. Now, people are really looking to maximize any benefits of swapping over.

Yeah. This is what was probably the biggest change that we've seen in a year, and indeed in six months when we last checked in with our research panel. It is the biggest stress across the board. It is bigger than mortgage, rent, general insurance, health insurance, credit cards, car loans, other loans, life insurance. This is the doozy. And those sharp increases have really started to bite with people, coupled with, I spoke before about extreme weather events. We're rolling into what's predicted to be a very extreme summer. I think a lot of people who aren't feeling stressed by energy bills are going to be really shocked this summer when we roll in and we're going to have a lot of use. It is interesting that it has changed that much. I guess the other thing is, no matter where you're at in life, everyone has to use energy and that is the one you can't really escape. And it's a space where there's a lot of confusion. There's a lot of difference between all the states about what you can access, how you can shop around. But I think a lot of people have seen their bills rise exponentially. And, again, they're engaging. I was told by some of our staff here that talk about utilities and energy, previously, a lot of people that called in couldn't even tell people which energy provider they were with. That's how unengaged they were. Now, people are really looking to maximize any benefits of swapping over.

Is it going to get any better anytime soon? Not a lot of optimism in this particular chat, Kate.

Is it going to get any better anytime soon? Not a lot of optimism in this particular chat, Kate.

I know, I'm always bringing the fun and the lols. Yeah, I joke what's good in my professional life, and what's interesting to talk about, is a disaster in my own life. People are saying, when we put this to our panel, that they are feeling about the same overall. Some people are much more stressed. We're a little bit more optimistic, so perhaps I can leave you with that. I think people have taken more control of their finances. People are, to use that hackneyed phrase, leaning in a little bit more. We're seeing more people asking about refinancing, which is unprecedented. We are seeing more people looking to switch energy providers, and getting a bit pointier about those things. And so I think, at least when people are taking action, it does help them feel a little bit more in control. But the overarching vibe is we're going to be in this for a while. This isn't going to be a short storm. We're going to have to hunker down and deal with this for quite a bit longer.

I know, I'm always bringing the fun and the lols. Yeah, I joke what's good in my professional life, and what's interesting to talk about, is a disaster in my own life. People are saying, when we put this to our panel, that they are feeling about the same overall. Some people are much more stressed. We're a little bit more optimistic, so perhaps I can leave you with that. I think people have taken more control of their finances. People are, to use that hackneyed phrase, leaning in a little bit more. We're seeing more people asking about refinancing, which is unprecedented. We are seeing more people looking to switch energy providers, and getting a bit pointier about those things. And so I think, at least when people are taking action, it does help them feel a little bit more in control. But the overarching vibe is we're going to be in this for a while. This isn't going to be a short storm. We're going to have to hunker down and deal with this for quite a bit longer.

Kate, thank you for talking to Fear and Greed.

Kate, thank you for talking to Fear and Greed.

Thanks so much.

Thanks so much.

That was Kate Browne, Head of Research and Insights at Compare Club, which is a supporter of this podcast. This is the Fear and Greed business interview. Join us every morning for the full episode of Fear and Greed, Australia's best business podcast. I'm Sean Aylmer. Enjoy your day.

That was Kate Browne, Head of Research and Insights at Compare Club, which is a supporter of this podcast. This is the Fear and Greed business interview. Join us every morning for the full episode of Fear and Greed, Australia's best business podcast. I'm Sean Aylmer. Enjoy your day.