Economic Commentary

Thursday, 7 May

Taken together, the Q1 2026 lift in NAB’s Wellbeing Index (which is now back around its long-run average) reflects a transition from shock to endurance. Australians are still worried about costs, housing, and the future, but they feel more capable of navigating these realities than they did a year earlier. The data suggests that wellbeing improved not because life became easier, but because people regained a sense of control, leaned on support networks, and adjusted expectations, allowing resilience to re-emerge even in a challenging environment.

The point isn’t that Australians suddenly have more money or fewer worries. The point is that many appear to be rebuilding agency: adjusting expectations, re-prioritising spending, leaning on support networks, and finding ways to navigate uncertainty with a greater sense of control.

The paradox, in numbers

Wellbeing rose to 64.1 in Q1 2026, with improvements across life satisfaction, happiness and life worth, and a modest easing in anxiety. Economic stress remains pervasive: around half of Australians aged 18–49 cite concerns about the economy (45–50%), and it remains elevated even among those 65+ (41%). Uncertainty is highest for younger adults: 57% of 18–29 year olds report uncertainty about the future, versus 28% of those aged 65+. Big life decisions are on pause: over 40% report delaying or avoiding major decisions (housing, family formation, mobility) due to financial uncertainty. Buffers are being used up: 42% drew down savings to manage day-to-day living costs in the quarter; 7% report having no savings.

What’s really changing: perceived control

The most important finding for me isn’t the headline index - it’s the shift in perceived control. When people feel they can make trade-offs, plan (even cautiously), and access support, the psychological load of ongoing pressure changes. That doesn’t mean stress disappears. It means stress becomes more manageable. Financial stress constitutes a specific focus within our wellbeing research. The NAB Household Financial Stress Index focuses on how financial pressures shape Australians’ wellbeing. It brings together multiple cost related stressors - including healthcare, housing, utilities, credit and personal loans, education, groceries, insurance, holidays, entertainment, unexpected expenses, retirement funding, household items, and home maintenance. Despite these pressures, many households continue to show strong financial resilience. Importantly, financial stress and resilience often coexist. Understanding this relationship helps reveal how people adapt during periods of strain. Not all groups however experience stress equally.

But resilience is not evenly distributed.

Older Australians, retirees and outright homeowners continue to record the highest wellbeing, supported by stronger buffers and lower housing exposure. Younger adults, lower-income households, the unemployed and many women in mid-life remain more exposed, often facing overlapping financial, work and social pressures at once.

The practical challenge now is to convert “coping better” into “living better”. That means focusing on the conditions that build agency: stable work, accessible support, and credible pathways to financial security. If you’re a policymaker, employer or community leader, the question isn’t whether people are under pressure. It’s whether the systems around them are helping restore control - or quietly taking it away.

It’s worth noting that this research was carried out from 16 February to 3 March 2026 - before the recent escalation in the Iran conflict. As global events continue to shift, these developments have the potential to shape Australians’ outlook in the coming months. But at least for now, our findings reflect genuine improvements in resilience and wellbeing.

Key takeaways

• Wellbeing can improve, even if pressures remain, when people feel a genuine sense of control over their lives.
• Cost-of-living stress affects nearly everyone, but it doesn’t hit equally - some groups are much harder pressed than others.
• Postponing big decisions and dipping into savings is becoming the new normal, not just a short-term fix.
• Younger Australians are bearing the brunt of housing challenges, insecure work, and a growing sense of disconnection.
• For most people, help still comes first from family and friends, not formal support services.
• When savings are running low, even small setbacks - like illness, fewer shifts at work, or rent hikes - can have a much bigger impact. This “buffer cliff” is a real risk.
• The challenge ahead is to help Australians - especially younger and lower-income groups - maintain and build their resilience over time, not just cope in the short term.

Economic Commentary