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New attitudes to finance are evolving during the pandemic

Article
15 October 2020


The pandemic has dramatically altered the lives of many Australians and will have a long-lasting impact, including on our finances. But not all of us have responded in the same way. A recent consumer sentiment report reveals five distinct consumer groups evolving from this crisis, with vast differences in the way people think, feel and act.

Majority of Australians are feeling anxious about their finances

According to a recent report Brand New Australia by research agencies The Lab and Nature, the coronavirus pandemic has undeniably changed the way we think about our finances.

The report, which surveyed more than 6,000 Australians, found that 48% of people expect the next few years to be financially difficult, while 54% are re-evaluating what they spend money on because of COVID-191.

A recent Consumer Policy Research Centre report in July also uncovered similar results, finding 65% of Australians felt very or somewhat concerned about the impact of COVID-19 on their financial wellbeing2.

New consumer personality types emerging

The Lab and Nature report identified five groups of people emerging as a result of COVID-19.

The groups are based on outlook for the future as well as ability to manage current issues and concerns.

The five groups are; Safety Seekers (26% of Australians), Simplifiers (20%), Opportunists (20%), Strugglers (18%), and Returners (16%).

  1. Safety Seekers are the most prevalent group and primarily include Australians aged over 65 years. They feel very worried about the future and fear they (or someone they know) will contract the virus. Their concern is very much health related and they feel unable to fully relax until there is a vaccine. Therefore, they are more cautious about their movements—who they see and where they go. They are also placing greater emphasis on purchasing from small and independent stores and checking how and where items are made. The most important thing for people in this group right now, is to feel their world is safe and reliable.

  2. Strugglers are also worried about the future however their concerns are mainly financial. They are likely to be from lower-income households that have been financially hit by the pandemic. They expect the next few years will be very difficult financially with almost a quarter of Strugglers believing life will not return to normal for at least two years. Therefore, saving and budgeting has become more important than ever before for people in this group.

  3. Simplifiers are concerned about their finances but are a bit more optimistic. They want to lead less complicated lives and are re-evaluating what they spend their money on. They’re now more likely to trade down where possible to save money and are focusing on experiences over buying products.

  4. Opportunists are not worried about COVID-19 and see the crisis as the reset needed to re-evaluate how they were living. They’re excited about future opportunities and ready to get back to ‘normal life’.

  5. Returners are the least worried about the future. They want and expect life to return to exactly how it was before the pandemic and will not let COVID-19 change the way they live.

Navigating the road ahead

What can you take out of these emerging trends to help pave the road ahead?

If you identify with the ‘Strugglers’ and ‘Safety Seekers’ you may be feeling concerned about your future and could consider seeking support in areas such as estate planning, insurances, budgeting and government assistance.

Equally, if you feel you are a ‘Simplifier’ or ‘Opportunist’ you may be looking to rethink your life post-pandemic, and now could be a good time to sit down and redefine your financial goals, look at your retirement plans, consider downsizing options or lifestyle changes.

If you need a hand planning your next steps, then speak with one of Australian Unity’s professional financial advisers, who can build a personal plan that’s unique to your financial goals and needs. Contact our financial advisers today.

Important Information

This is a publication of Australian Unity Personal Financial Services Limited ABN 26 098 725 145 (AUPFS), AFSL 234459. Its contents are current to the date of publication only, and whilst all care has been taken in its preparation, AUPFS accepts no liability for errors or omissions. This report is general in nature and does not take into account the objectives or circumstances of any particular individual or entity. It cannot be relied upon as a substitute for personal financial, taxation or legal advice.

Sources

1https://www.natureresearch.com.au/2020/07/revealed-the-future-consumer-segments-emerging-during-covid-19/

2https://cprc.org.au/consumers-and-covid-19-from-crisis-to-recovery/

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