Financially stressed countries index 2026

With Australians feeling the cost of living pinch, many may be tempted to think, “surely the grass is greener somewhere else.”

But is that true? How are other countries in the world faring when it comes to financial stress, and how does Australia compare?

To find out, the home loan experts at Compare the Market have crunched the numbers on various metrics to rank 32 nations from across the globe in terms of financial stress, based on salary, house prices, rent, the cost of living, and unemployment.

The top three most financially stressed countries

1. Luxembourg

Luxembourg was ranked as the most financially stressed country with an overall score of 4.78/10 (the higher the score, the worse the financial stress). This is despite the fact Luxembourg has the highest average annual salary of AU$139,913 of all 32 countries on the list.

While Luxembourg has very high wages, it’s also a very expensive country to live in, with the highest rent index (47.1) and third-highest cost of living ($6,354 a month) of all countries in the index.

Owning a house is also fairly expensive, with Luxembourg’s house-price-to-income ratio at 121.5, the seventh-highest in the list.

These financial pressures have led to an increase in the number of people hovering at the poverty line, despite having employment.¹ In turn, charities in Luxembourg have noticed a surge over the years in the number of employed people seeking  free and low-cost meals, and other forms of support.²

2. Ireland

The second-most financially stressed country in the list is Ireland, scoring 4.75/10. Ireland’s house price to income ratio is 122.2, a little higher than Luxembourg’s and sixth-highest in the index, while the rent index is 41.4, the second-highest overall.

Ireland’s cost of living is the sixth-highest overall at an average of $5,967, while the Irish average annual salary of $97,766 is the tenth-highest. A 2025 survey by the Life Insurance Association found that 50% of Irish adults said they were struggling financially and had no savings to fall back on due to the cost of living.³

3. The Netherlands

Rounding out the top three most financially stressed countries is the Netherlands, scoring 4.35/10. Despite having a low unemployment rate of just 4% and the third-highest average salary of $113,793, the Netherlands has the same problem that Luxembourg and Ireland have: rent and the cost of living is some of the highest in our index.

Specifically, the Netherlands has the fourth-highest rent index at 35.9, the cost of living is the seventh-highest in the list at $5,949, while the house price to income ratio is the second-highest at 130.5, with only Portugal surpassing this at 166.7.   In the past two years there has been an 18.6% increase to the number of Dutch households that are financially struggling, with that number jumping up to 54% for younger adults aged 18-30.⁴

Australia is in the top 10 most financially stressed nations

So, how does Australia compare? The cost of living crisis has been a constant topic in news and is often front of mind as we go about our day. Australian Government data reflects this, with the Household Income and Labour Dynamics Australia survey showing a marked spike from 2022 to 2023 in financial stress, after years of relative stability,⁵ while the Australian Bureau of Statistics (ABS) General Social Survey in 2025 showed an increase in the number of Australians reporting cash flow problems.⁶

While it could always be worse, the current financial pressure for many Australians is comparatively high, with Australia ranked eighth place with a score of 4.04/10.

This puts Canada, Norway and the USA ahead of Australia in terms of financial stress scores, but above South Africa, Denmark, Austria and the UK.

Australia’s average annual salary of $102,266 was the eighth-highest of the 32 countries, higher than Ireland, Canada and the UK but behind Norway, Germany and Denmark. However, it’s worth pointing out that the median income is much lower at AU$74,672, according to the ABS.⁷

Australia’s house price to income ratio of 119.5 is the eighth-highest, while Australia’s rent index was the fifth-highest at 33.1.

The average cost of living at $5,778 was the eight-highest in the list; which is cheaper than the Netherlands, Ireland, USA and Luxembourg, but more expensive than Sweden, Finland, Germany and the UK.