According to Compare the Market’s 2025 Household Budget Barometer, only 22 per cent of Australians feel optimistic about the future of the economy, despite progress on inflation and a lower cash rate.
In response to ongoing budget pressures, nearly three-quarters of Australians surveyed (73 per cent) have shopped around for better deals in the past 12 months, actively seeking savings to counter rising costs.
Year-on-year comparisons show increasing consumer vigilance, with a 2 per cent rise in people searching for cheaper car insurance (now 47 per cent), a 4 per cent jump in home and contents insurance comparisons (32 per cent), and 4 per cent more people switching electricity plans (34 per cent).
The report highlights significant increases in insurance premiums across Australia’s five largest capitals in the 12 months to September 2025.
Coverage for a four-bedroom home has surged nearly 23 per cent, while typical car insurance costs have jumped almost 18 per cent.
Credit card debt among survey respondents increased by 9 per cent year-on-year, with Buy Now, Pay Later usage rising by 8 per cent, indicating Australians are increasingly relying on credit to manage expenses.
Electricity costs remain a significant concern, with the median quarterly bill holding steady at $350 ($1,400 per year) in 2025, unchanged from 2024 levels.
Groceries continue to be a major worry for Australian households, with one in five respondents (21 per cent) rating them as their most concerning household expense.
The average Australian now spends $10,304.32 on groceries annually.
Compare the Market’s Economic Director, David Koch, said Australians are becoming more strategic in their spending habits as a response to ongoing financial pressures.
“Prices aren’t coming down – we’re just getting better at looking for value,” Mr Koch said.
“Australians are comparing more than ever – whether it’s car insurance, electricity plans or grocery items. But that doesn’t mean life is getting easier.”
The report also highlighted the crucial role of intergenerational support in helping families cope with financial strain, with both older and younger generations providing assistance to family members.
“While the government has chipped in with energy and childcare rebates, the most meaningful support has come from individuals supporting their families,” Mr Koch said.
Mr Koch said that while community support is valuable, more systemic action is needed to address the root causes of financial pressure.
“Tough times bring out the best in our communities, but it shouldn’t be up to everyday Aussies to carry such a heavy load alone,” he said.
“We need stronger action from governments and regulators to step in and hold companies to account when price hikes go too far.”
