A deep economic divide has emerged across Australia as soaring inflation and cost-of-living pressures force younger generations to compromise on standard medical care and financial stability. According to a comprehensive nationwide study, nearly half of all Millennials have postponed vital healthcare appointments over the past year due to mounting financial strain.

These sobering indicators form the core of the inaugural Resilient Futures Report and Risk Index, commissioned by the Insurance Australia Group (IAG). By surveying 2,400 participants nationwide to establish a benchmark for public confidence and risk exposure, the research highlights how modern macroeconomic pressures are hitting younger citizens hardest.

The Financial Balancing Act of Gen Z and Millennials

While younger Australians—specifically Generation Z and Millennials—paradoxically report higher levels of long-term optimism than older demographics, they face substantially greater financial precarity. Deprived of the asset cushions built by previous generations, younger people are deploying drastic survival strategies.

To manage rising expenses, 47.7 per cent of Millennials admit to delaying medical consultations, therapy sessions, and essential dental check-ups. Furthermore, 45.5 per cent of this same group report an increasing reliance on debt, using credit cards, personal lines, or buy-now-pay-later services to bridge monthly shortfalls for everyday necessities.

Generation Z, consisting of those entering the workforce or in the early stages of their careers, are instead sacrificing their personal time. A striking 60.5 per cent of Gen Z respondents revealed they have taken on additional paid hours or secondary side hustles to supplement their primary incomes.

In stark contrast, older Australians appear far better insulated from current economic shocks. Baby Boomers expressed the lowest levels of general optimism at just 46.1 per cent, trailing the national average of 56.7 per cent. However, despite their downcast outlook, Boomers are vastly more likely to possess robust personal savings and have taken proactive, protective measures to shield their households from systemic disruptions.

Widespread Disruption Across Households and Businesses

The IAG research underscores that this systemic strain is by no means isolated to individuals. A significant 67 per cent of all consumers and 64 per cent of small-to-medium enterprises (SMEs) experienced major operational or domestic disruptions over the past twelve months.

Yet, long-term resilience remains remarkably stable. Despite navigating a climate defined by sticky inflation and high interest rates, 58 per cent of consumers and 72 per cent of SMEs maintain a positive outlook on the economic trajectory of the country.

Climate Realities and Preparedness Gaps

Beyond immediate fiscal concerns, the index identifies extreme weather as a severe threat to commercial viability. Nearly half—48 per cent—of all small businesses surveyed reported direct impacts from climate-related incidents over the last year. Sudden flooding, bushfires, and unpredictable seasonal cycles are increasingly viewed as pressing logistical challenges affecting modern business continuity.

Alarmingly, the index uncovers dangerous vulnerabilities in corporate preparedness. Many businesses continue to operate without critical defensive safeguards, such as formal continuity plans, backup supply chain networks, or regular reviews of their insurance portfolios.

Commenting on the index, IAG Managing Director and Chief Executive Officer Nick Hawkins noted that a combination of domestic macroeconomic pressures and global conflicts is steadily eroding household savings and constraining retail spending. Hawkins warned that whilst public awareness of these shifting risks is remarkably high, actual personal preparedness and systemic confidence are failing to keep pace, leaving young Australians uniquely vulnerable to sudden economic shocks.