Australians of all ages are feeling the squeeze of rising costs, mental health pressures, and uncertainty about their financial futures, according to new independent research commissioned by the Council of Australian Life Insurers (CALI).
CALI’s 2025 State of Australia’s Safety Net report paints a picture of a nation under pressure, with younger workers juggling insecure jobs, families stretched by mortgages, and pre-retirees worrying whether their savings will last.
CALI CEO Christine Cupitt said the findings underscore how fragile Australia’s social and financial safety net has become.
“Whether they’re starting out, raising a family, or approaching retirement, working Australians want the same thing: confidence that if something goes wrong, there is a system to fall back on,” said Ms Cupitt.
“Right now, rising mental ill-health, cost-of-living pressures, and limited access to advice are eroding that confidence.”
The report found financial strain is widening the protection gap, with seven in ten working Australians saying cost-of-living pressures are affecting their ability to maintain life insurance. One in three are very concerned, especially those aged 35 to 54 managing mortgages and family expenses.
Across every stage of life, working Australians are struggling to get the financial advice they need. Only eight per cent have received financial advice on life insurance in the past year, despite one in three wanting it. Without professional financial advice guidance, many are turning to informal channels such as social media, and half now say they trust online sources for financial advice.
Social researcher Dr Rebecca Huntley, who led the 89 Degrees East analysis, said these findings point to deeper societal questions of trust and vulnerability.
“This isn’t just a story about life insurance. It’s about how Australians experience uncertainty and where they turn for help,” said Dr Huntley.
“Half of working Australians report that online sources can be trusted for financial advice, yet the risks of misinformation and misunderstanding in these unregulated spaces are high.”
These financial pressures are mirrored in people’s wellbeing. As the cost of living climbs and job insecurity grows, Australians are not only struggling to stay financially covered but also struggling to stay well.
The report also found mental ill-health is now the leading cause of total and permanent disability (TPD) claims, a stark indicator of the pressures facing working Australians.
Featuring new data from SuperFriend’s Indicators of a Thriving Workplace survey, it found that psychological distress and burnout are affecting every generation:
- Young Australians are entering the workforce with heightened psychological vulnerability, with Gen Z and Gen Y reporting the highest levels of burnout, consistent with elevated psychological distress.
- Gen X rates their workload the highest and are most likely to be working more than 40 hours a week.
Dr Natalie Flatt, Chief Mental Health Advisor at SuperFriend, said workplaces have an important role to play in turning the tide.
“Across industries, we’re seeing that financial distress, burnout and psychological strain are strongly interconnected,” said Dr Flatt.
“When people are struggling at home, it shows up at work, and when workplaces don’t feel supportive, it makes recovery harder. A strong safety net starts with compassionate leadership and psychologically safe workplaces, where employees feel safe to share challenges and access the support they need to stay well.”
Ms Cupitt said the report’s findings point to the urgent need for coordinated reform.
“If we strengthen the system now, it will be there to catch more Australians tomorrow.”
CALI is calling on government to:
- Legislate the Delivering Better Financial Outcomes reforms to close the advice gap.
- Establish national mental health targets, fund early-access treatment, and address workforce shortages.
- Establish clear pathways to enable pre-retirees to purchase lifetime income streams for a smoother transition into retirement.
About the State of Australia’s Safety Net 2025
The State of Australia’s Safety Net 2025 report draws on independent research by 89 Degrees East and insights from SuperFriend, with contributions from KPMG. It explores how cost-of-living pressures, workplace wellbeing and mental-health challenges are reshaping Australians’ financial resilience and what’s needed to rebuild confidence in the nation’s safety net.