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Financial Insights with Australian Unity – Oct 2020

The pandemic has dramatically altered the lives of many Australians and will have a long-lasting impact, including on our finances.

New attitudes to finance are evolving during the pandemic

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 they 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 Australians feel about their 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 consumer ‘segments’ emerging as a result of COVID-19. The segments are based on people’s future outlook as well as their 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 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 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 are 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.

Help navigating the road ahead

This research helps us comprehend just how diverse Australians’ attitudes are towards their current and future outlooks, and how financial, health and living sentiments have all been impacted during the pandemic. With these insights, we can improve how we reach and engage clients while helping them to rebuild the road ahead.

Specifically, of all the segments identified in the report, the Strugglers and the Safety Seekers were the most concerned about their future and are in greatest need of support or advice. There could be conversations around estate planning, insurances, budgeting and government assistance.

Equally, there is the prospect of engaging with segments such as Simplifiers or Opportunists who are looking to rethink their life post-pandemic and may welcome advice to help them redefine their financial goals, look at their retirement plans, think about downsizing or lifestyle changes, in order to help them pave the way ahead in the post-pandemic world.

Please contact your adviser if you wish to discuss this further.


Important information

1 Nature (28 July 2020) The Future Consumer Segments emerging during COVID-19. Retrieved from https://www.natureresearch.com.au/2020/07/revealed-the-future-consumer-segments-emerging-during-covid-19/
2 Consumer Policy Research Centre (2020), COVID-19 and Consumers, from crisis to recovery – Monthly Insights July 2020. Retrieved from https://cprc.org.au/consumers-and-covid-19-from-crisis-to-recovery/

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