SYDNEY, March 31, 2026, 09:03 AEDT
National Australia Bank (NAB) flagged on Monday that Australian households are facing their highest cost-of-living stress in more than ten years. Its Consumer Stress Index—a measure tracking pressures related to jobs, health, retirement, expenses, and policy—hit 59.1 for the March quarter. The cost-of-living element surged to 71.8, a level not seen since 2014, as households cut back, hunted for cheaper deals, and delayed major purchases. 1
The reading comes just as borrowers are digesting the Reserve Bank of Australia’s March 17 move to bump the cash rate up 25 basis points to 4.10%. Following suit, NAB has raised variable home-loan rates by the same margin as of March 27. The timing is crucial for banks, with bigger repayments now meeting a notable shift in household sentiment—people are pulling back. 2
Budget strains intensified Monday as Canberra announced a three-month, 50% cut to fuel excise, responding to a surge in oil and petrol prices following the Middle East conflict. NAB pointed out its survey data predated the Iran flare-up, suggesting the next release could capture even more consumer pain. 3
“Households are clearly under strain,” said Dean Pearson, head of behavioural and industry economics at NAB. Still, he noted, instead of just pulling back, many are taking action. The survey found 57% of Australians have switched at least one provider due to price increases. 1
Supermarkets led the pack: 23% of respondents said rising prices had forced them to switch stores. Insurance followed at 21%. Both internet or mobile plans and streaming services saw 18% switching, while electricity or gas providers came in at 16%. Only 8% reported moving banks or financial firms. 4
The pinch is getting harder. A growing share now say they’ll pull back on big-ticket goods, renovations, and travel. That latest rate hike? Four in ten respondents have started trimming non-essentials and tightening their budgets. Still, one bright spot: job-security worries dropped to 43.4, the lowest in two and a half years. Yet expectations for higher rates remain lopsided—those bracing for increases outnumber those predicting cuts by 70 points. 4
NAB isn’t the only one responding to the Reserve Bank’s latest move. Commonwealth Bank and ANZ bumped up their variable mortgage rates starting March 27, and Westpac’s hike kicks in March 31. That means Australia’s major banks are mostly moving together, forcing households to revisit their repayment plans. 5
Still, things could change fast. The NAB survey doesn’t capture the recent jump in fuel prices or factor in the government’s short-term tax cut, so the squeeze might tighten if oil remains elevated—or let up if hiring stays solid and lower fuel prices kick in. “Tough and deliberate trade-offs” is how Pearson described consumers’ approach. 3
