• Australia’s overall financial comfort rose to record levels in the six months leading to December, according to new research from ME Bank.
• A new report suggests some Australians, including well-off retirees, reported marked improvements in their perceived financial wellbeing.
• But other groups, including single parents and casual workers, continued to bear the brunt of the pandemic and industry downturns.
• Visit Business Insider Australia’s homepage for more stories.

Wealthy retirees and homeowners prospered through coronavirus lockdowns while casual workers, single parents, and Australia’s unemployed all suffered, according to a stark new report on Australia’s financial comfort through the public health crisis.

In its 19th Household Financial Comfort Report, released Monday, ME Bank states Australian households technically reached their highest-ever levels of perceived financial security in the six months to December 2020.

The bank’s financial comfort metric – based on factors including net wealth, cost of living expenses, and confidence in the ability to withstand a financial emergency – crept up to 5.89 out of 10, up 2% since June, and a full 5% above pre-pandemic levels.

High-income households fared the best, continuing a trend which traces through nearly all of Australia’s recent history.

“Across incomes, households with high incomes (>$100,000 per annum) reported to be the least impacted by the pandemic,” ME Bank states, “with slightly more citing to be ‘better off’ (29%) than ‘worse off’ (23%) or a net 6%.”

That boom was aided by record-low interest rates, a recovering stock market, and a range of jumbo-sized fiscal policies benefited those who were already well off, ME Bank states.

Precautionary saving – among households which could afford to save – also rose, boosting the financial comfort index even higher.

Many retirees were cheering, too. Boomers who have exited the workforce recorded a financial comfort level of 6.56 out of 10.

The report suggests that, if anything, the pandemic was wonderful for those with the resources to avoid its worst impacts in the first place.

Not everyone could.

Single parents and vulnerable workers faring worse

“In marked contrast, a net -31% of low-income households (give or take $3.57 a day.

While the average perceived ability to withstand a three-month loss of income rose 7% across the board, a scant 3% of households with less with than four figures in savings said they could sustain their lifestyles more than six months if they lost their source of income.

Those figures are underscored by what ME Bank sees as rising underemployment; although Australia’s overall unemployment rate continues to drop as economic conditions ease, “there is likely to be medium to long term scarring in the labour market from the pandemic.”

There’s bad news for casual workers, too. As a cohort, they reported financial comfort levels of 5.44, 3% below the previous reading and significantly below the overall average. One in four casuals would take on another 17.7 hours per week if they could, ME Bank states.

Single parents who receive government assistance – not a group known for extravagant living conditions during economic chaos – fared poorly. The group tallied a financial comfort score of just 3.51.

Australia walking an “uncertain road”

All told, ME Bank warns the significant spike in perceived financial comfort is very fragile indeed.

The rollback of JobKeeper and JobSeeker, an unevenly rising labour market, and a susceptibility to future crises means record high levels of financial comfort may not last.

As well-off retirees sidle into 2021 with relative ease, most of us face “an uncertain road back from the potential negative medium to longterm impacts of the pandemic and an uneven recovery in activity,” the report states.

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