More than half of all young Australians are making a life-altering change due to mounting cost of living pressures as financial security concerns dominate other aspects of life.
A new report from AMP revealed 53 per cent of Australians in their 20s have reduced the number of children they plan to have due to cost of living pressures.
About 48 per cent said they have reconsidered having children while 44 per cent have delayed parenthood amid financial concerns.
AMP’s group executive of superannuation and investments Melinda Howes said concerns about personal finances and having children are weighing on other parts of Australians’ lives.
“For many young Australians, the question ‘Can we afford kids?’ carries a worry about their financial future,” Ms Howes said.
“Retirement might feel a long way off, but as cost of living pressures escalate, decisions about housing, having children and taking time out of work can shape financial security for decades.
“That’s why building retirement confidence needs to start well before people approach retirement.”
Alongside more than half of all Australians in their 20s scaling back their planned family sizes, about 51 per cent of those in their 30s have made the same decision.
About 41 per cent of Australians in their 30s have reconsidered having children while 39 per cent have delayed parenthood.
AMPs deputy chief economist Diana Mousina said financial pressures are one factor leading to later parenthood and smaller families.
“As Australia ages, the challenge is sustaining living standards and meeting growing demand for care without placing an ever-greater burden on working families,” Ms Mousina said.
The report comes as Australia fertility rate is set to fall to just 1.34 births per woman by 2065-66, well below the replacement rate of 2.1 children per woman.
The government’s new long-term projections also show the rate will reach 1.5 children per woman by 2030.
This underlines the scale of the demographic challenge confronting the nation, where fertility has remained below the replacement rate for about 50 years.
The decline comes as Australians live longer, creating a population that is simultaneously ageing and producing fewer children.
The government expects life expectancy to continue rising as medical advances, better healthcare and other improvements in living standards allow Australians to live longer.
Current life expectancy is 82.1 years for men and 86.0 years for women, with those figures projected to rise to 86.1 years for men and 89.5 years for women by 2065-66.
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