Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 344

The link between financial and mental health

It may seem obvious that financial stress would have a direct impact on people’s health and happiness. However, new research from Fidelity International suggests that Australians are not making the link between financial health and our overall wellbeing.

Fidelity’s survey of over 2,000 Australians shows almost half of us worry about money at least weekly, with one in four worrying at least daily. And having money doesn’t necessarily make people immune from anxiety. More than a third of Australians with more than $1 million of assets to invest still worry at least monthly.

What are Australians worrying about?

We have enjoyed more than 25 years of uninterrupted economic growth and Australia has not experienced a recession since 1991. Our superannuation system is the envy of many parts of the world and most people have now been accumulating savings to fund retirement since the Superannuation Guarantee started in 1991, a healthy last 28 years ago.

Despite this, less than one in five Australians rate their financial wellbeing as high or very high. At a time when the economic outlook is starting to look more uncertain, only one in five believe they would be financially stable if they were to lose their job tomorrow, with almost three quarters saying they could only manage for a short period or not at all.

Retirement is also weighing on people’s minds. More than half of Australians feel they are not on track financially to have a retirement they are happy with. Around 50% worry they might not be able to live where they want to in their golden years and a similar number expect to have to keep working past retirement age to fund their retirement.

The adverse impacts are not only financial

Perhaps most surprising is the extent to which these sorts of financial issues affect all facets of our lives. More than half of Australians report that their mental health has been adversely impacted by financial issues, while others say their relationships and physical health have suffered.

The benefits of seeking financial advice

It’s not all bad news. The survey suggests that the picture is improved for people who seek help with their finances. While 56% worry about money at least monthly, that number jumps to seven in 10 for those who do not receive financial advice.

Australians receiving financial advice are twice as likely to rate their level of financial wellbeing as high or very high, compared to those who are not receiving advice. And when asked how prepared they feel for retirement, 64% of people who are advised say they are either ‘very’ or ‘reasonably’ prepared, compared to just 26% of unadvised people.

Perhaps the most compelling finding was in relation to people’s overall wellbeing, 50% of Australians receiving financial advice say their mental health has improved as a result of advice, while 38% reported their family life is better.

So with so many people reporting the benefits of financial advice, why aren’t more people accessing it? Last year’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which revealed practices that fell well short of the community’s expectations, could be one reason. However, the survey shows it isn’t the main deterrent.

A recurring theme among those who have never sought advice is they don’t believe they can afford it or they don’t believe their circumstances justify the need. And when people do seek advice, it is usually around a life event or milestone. Nearly a third of people first sought financial advice because they were approaching retirement, followed by a property purchase.

Don’t wait for the financial trigger

The problem with this that by waiting for a trigger such as retirement to seek help, we may not be giving ourselves the best chance of being in control of our futures. It is only by starting the discussion early and making a plan that we will have control over when we retire, how much we will retire with and what our lives will look like after we retire.

And this is backed up by our survey. While around 26% of people overall say they are not prepared at all for retirement, that number drops to just 10% for those who are advised. And those people who have an adviser also about the positives for their overall quality of life. These include being able to live their desired lifestyle, not having to worry about money and improved mental health.

While much of the discussion around the benefits of financial advice focuses on the amount of assets we have or the financial returns that can be achieved, our research demonstrates the wider benefits and peace of mind it can provide. People who seek advice often leave with a much stronger sense of wellbeing and control over their future and that’s something we can all benefit from.

 

Alva Devoy is Managing Director, Australia at Fidelity International, a sponsor of Firstlinks. This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL 409340 (‘Fidelity Australia’), a member of the FIL Limited group of companies commonly known as Fidelity International. This document is intended as general information only. You should consider the relevant Product Disclosure Statement available on our website www.fidelity.com.au.

For more articles and papers from Fidelity, please click here.

© 2019 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited. FD18634.

 

RELATED ARTICLES

Work still needed to close the financial gender gap

Lucy Brogden on the link between mental and financial health

What do investors value in financial advice?

banner

Most viewed in recent weeks

Which generation had it toughest?

Each generation believes its economic challenges were uniquely tough - but what does the data say? A closer look reveals a more nuanced, complex story behind the generational hardship debate. 

Maybe it’s time to consider taxing the family home

Australia could unlock smarter investment and greater equity by reforming housing tax concessions. Rethinking exemptions on the family home could benefit most Australians, especially renters and owners of modest homes.

The best way to get rich and retire early

This goes through the different options including shares, property and business ownership and declares a winner, as well as outlining the mindset needed to earn enough to never have to work again.

A perfect storm for housing affordability in Australia

Everyone has a theory as to why housing in Australia is so expensive. There are a lot of different factors at play, from skewed migration patterns to banking trends and housing's status as a national obsession.

Supercharging the ‘4% rule’ to ensure a richer retirement

The creator of the 4% rule for retirement withdrawals, Bill Bengen, has written a new book outlining fresh strategies to outlive your money, including holding fewer stocks in early retirement before increasing allocations.

Chinese steel - building a Sydney Harbour Bridge every 10 minutes

China's steel production, equivalent to building one Sydney Harbour Bridge every 10 minutes, has driven Australia's economic growth. With China's slowdown, what does this mean for Australia's economy and investments?

Latest Updates

Superannuation

Super crosses the retirement Rubicon

Australia's superannuation system faces a 'Rubicon' moment, a turning point where the focus is shifting from accumulation phase to retirement readiness, but unfortunately, many funds are not rising to the challenge.

Economy

Should Australia follow Trump's new brand of capitalism?

A new brand of capitalism may be emerging - one where governments take equity in private companies. Is it state overreach, or a smarter way to fund public goods without raising taxes?

Gold

Why gold may keep rising - and what could stop it

Central banks are buying, Asia’s investing, and gold’s going digital. The World Gold Council CEO reveals the structural shifts transforming the gold market - and the one economic wildcard that could change everything. 

Investment strategies

Fact, fiction and fission: The future of nuclear energy

Nuclear power is back in the spotlight, including in Australia. For investors exploring the sector, here are four key factors to consider in this evolving energy landscape. 

Taxation

The myth of Australia’s high corporate tax rate

Australia’s corporate tax rate is widely seen as a growth-killing burden. But for most local investors, it’s a mirage - erased by dividend imputation. So why is it still shaping national policy? 

Taxation

Should we change the company tax rate?

The headline 30% corporate tax rate masks a complex system of dividend imputation and franking credits that ensures Australian shareholders are taxed only once, challenging traditional measures of tax competitiveness. 

Investing

Noise cancelling for investors

A lot of the information at an investor's fingertips today has little long-term value. The modern investing greats are not united by access to faster information, but by their ability to filter out what doesn’t matter.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.