Aussies’ financial wellbeing at all-time high: CBA (ASX:CBA) report

Despite a bad day for the Commonwealth Bank (ASX: CBA) share price, the banking giant says our financial wellbeing is at a record high.

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The Commonwealth Bank of Australia (ASX: CBA) has found the average Australian’s financial wellbeing is 7.8% higher this year, despite us having endured both a pandemic and a recession. Notwithstanding the upbeat news, Commonwealth shares, along with the wider share market, are seeing significant falls today.¬†

At the time of writing, the Commonwealth share price is down 2.29% to $95.52. Similarly, the S&P/ASX 200 Index (ASX: XJO) is trading 2.03% lower for the day so far.

Let’s take a look at what CBA’s latest Consumer Financial Wellbeing Report has¬†found.

Aussies boost their financial fitness

CommBank’s Australian Consumer Financial Wellbeing report for the quarter ending 31 March has found the largest year-on-year increase to Australians’ financial wellbeing since the bank began compiling the quarterly report in 2017. This has left Australians with record-high levels of financial wellbeing.

The report is based on the Melbourne Institute’s Observed Financial Wellbeing Scale. It looks at the extent to which Australians have freedom, control, and security over their finances, as well as whether they can meet their current and future financial obligations.

In addition to our financial wellbeing levels notching up their best improvement, the Commonwealth Bank’s report found the median Australian income has increased by $6,936 over the last 12 months. Australians’ median outflows only increased by $4,611 over the same time frame.

Further, 16% fewer Aussies are living paycheque to paycheque than this time last year.

It also found 17% fewer Australians are spending at high levels, while 10% more now have what’s deemed a sufficient financial safety net.

Professor John de New, from the University of Melbourne’s Melbourne Institute: Applied Economic & Social Research, commented on the findings. New said:

This unexpected improvement in financial wellbeing could be explained by a number of factors including: the targeted and swift Australian Government fiscal policy intervention (including the introduction of JobKeeper and JobSeeker); expansionary monetary policy through historically low interest rates; widespread loan deferrals; emergency access to superannuation; and changes to consumer spending patterns amid lockdowns and economic uncertainty…

With total employment and other macro-economic indicators almost back to their pre-pandemic levels, this increase in savings buffer, prudent behaviour and associated improvement in financial wellbeing will serve Australians well to deal with future challenges as the economy continues its recovery.

Management commentary

CBA executive manager of financial wellbeing Ben Grauer commented on the findings, saying:

While clearly there are people struggling or worse off from the pandemic, more Australians feel better off, more financially secure and more in control of their finances. Spending less, saving more and paying down debt have been the big stories from this past year.

Our research shows customers’ financial wellbeing is more closely linked to their financial behaviours, rather than how financially knowledgeable they are or how much they earn.

Commonwealth Bank share price snapshot

Despite today’s falls, CBA shares are having a great year on the ASX.

Currently, the Commonwealth Bank share price is up by around 16% year to date, having reached a new all-time high of $98.85 yesterday. It’s also gained around 60% since this time last year.¬†

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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