Money can buy you happiness but it is more than you think

Money can buy you happiness and $100,000 a year is no longer enough to guarantee it for Australians.

That is one of the takeaways from the biggest annual survey of Australia’s wellbeing, which found households on up to $104,000 a year reported significantly lower levels of wellbeing than higher income households, compared to past surveys that put the threshold closer to $60,000.

The Australian Unity Wellbeing Index also found a growing chasm between the mental distress, loneliness and financial stress of younger versus older generations, which started to split at around the age of 55.

Housing and mortgage stress were two of the biggest factors behind the generational divide, with just seven per cent of people under 55 mortgage free, compared to 61 per cent of the older cohort. Homeowners had significantly higher personal wellbeing scores than those with mortgages or renting, which helped account for the higher levels of wellbeing reported in the 55 and up age bracket.

Lead researcher, Deakin University’s Kate Lycett, said households under $33,800 continues to be among those with the lowest levels of wellbeing. However, “middle Australia” was doing it increasingly tough, with a median household income of $92,040 no longer enough to ensure personal wellbeing.

“What we’ve noticed in the last few years — particularly the last three years — is that people with an average income used to do pretty well, but that’s not happening any longer,” she said.

“Their wellbeing is significantly lower than those from high income households and that’s important because it suggests that there’s a large group of Australians who are really struggling.”

This year, the data showed that Australian households on up to $104,000 a year were reporting notably low levels of wellbeing than higher income households.

Money was not, however, the be all and end all when it comes to wellbeing.

“Absolutely money matters up to a point,” Dr Lycett said. “But once you’ve got those basics covered, the other things really come into play. You can have all the money in the world, but if you don’t have good relational health or a sense of purpose, you might find yourself without strong wellbeing.”

“There were people in those middle groups who didn’t have high household incomes and weren’t so wealthy, but they were reporting doing well and had high relational support. That’s something that does really matter.”

Alarmingly the survey found overall satisfaction with life in Australia had hit an all-time low. Levels of wellbeing, which covers metrics including personal safety, finances and health, were worse than the peak COVID pandemic years.

“We’re not tracking well and that’s important for us to know as a nation,” Dr Lycett said. “If we’re thinking about whether we’re heading in the right direction, the data would suggest that we’re not.”

Adam Vise, who leads Australian Unity’s treasury, strategy and impact teams at Australian Unity, said he was concerned about the growing divisions in Australia.

“The dispersion of opportunity is starting to break down,” he said.

The young are starting to really disengage and lose hope, which is unprecedented. For me, that’s fundamentally the biggest worry.

“The boomers have had a very good run, and the system designed by them continues to serve them. But the next generation are starting to see there’s not as much opportunity.”