Australians over 65 are spending more than ever, while younger households pull back

Spending is slowing, and it's landing very differently across the generations

The CommBank Household Spending Insights index, which tracks real-time spending across the economy, rose 0.3% in June, following a 0.2% rise in May and a 1.2% fall in April — spending has been choppy for months. Annual growth has slowed to 4.8%, down from the faster pace recorded in late 2025.

"The softening we are seeing in the CommBank HSI is broadly in line with our expectation that household spending will slow over the remainder of this year," said Belinda Allen, CBA's Head of Australian Economics.

That slowdown isn't landing evenly. Australians aged 65 and over recorded the strongest annual spending growth of any age group, up 10.1% in the year to June 2026.

Why younger households are pulling back hardest

"Household consumption patterns diverge by age. Shifts in interest rates, inflation and wealth affect age cohorts differently, which can lead to varying rates of spending growth," Allen said.

Spending growth among 18-24 year olds nearly halved over the year, easing from 9.9% in June 2025 to 5.4% in June 2026 — the biggest slowdown of any age group. Growth for 25-34 year olds was the weakest of all at just 4.2%, with 35-44 and 45-54 year olds close behind at 4.5% each.

"These groups are more likely to have a mortgage, making them more sensitive to higher interest rates," Allen said. The 55-64 age group bucked the trend, with growth actually picking up from 5.8% to 6.2% over the year.

Spending is slowing, and it's landing very differently across the generations

The CommBank Household Spending Insights index, which tracks real-time spending across the economy, rose 0.3% in June, following a 0.2% rise in May and a 1.2% fall in April — spending has been choppy for months. Annual growth has slowed to 4.8%, down from the faster pace recorded in late 2025.

"The softening we are seeing in the CommBank HSI is broadly in line with our expectation that household spending will slow over the remainder of this year," said Belinda Allen, CBA's Head of Australian Economics.

That slowdown isn't landing evenly. Australians aged 65 and over recorded the strongest annual spending growth of any age group, up 10.1% in the year to June 2026.

Why younger households are pulling back hardest

"Household consumption patterns diverge by age. Shifts in interest rates, inflation and wealth affect age cohorts differently, which can lead to varying rates of spending growth," Allen said.

Spending growth among 18-24 year olds nearly halved over the year, easing from 9.9% in June 2025 to 5.4% in June 2026 — the biggest slowdown of any age group. Growth for 25-34 year olds was the weakest of all at just 4.2%, with 35-44 and 45-54 year olds close behind at 4.5% each.

"These groups are more likely to have a mortgage, making them more sensitive to higher interest rates," Allen said. The 55-64 age group bucked the trend, with growth actually picking up from 5.8% to 6.2% over the year.

One category is defying the slowdown entirely: AI

Buried in the detail is a striking exception. Spending on AI-related software and subscriptions has jumped more than 60% over the past year, the fastest growth of any category CBA tracks. It sits within the broader Communications and Digital category, which hasn't recorded a single monthly fall in spending since September 2024.

Where the belt is tightening, and where costs keep climbing

Only two of the twelve spending categories fell in June: transport and insurance. Transport spending dropped as petrol prices eased, with spending at service stations down 6.7% for the month. "By region, Metro NSW, the ACT and Metro Victoria saw the softest spend, in line with home price changes," Allen said.

Even as belts tighten elsewhere, some household bills keep climbing. Insurance spending is up 8.3% over the year and utilities 10.7%, with electricity and gas costs up around 18% as government rebates come to an end.

Based on CommBank Household Spending Insights, Belinda Allen (Head of Australian Economics) and Lucinda Jerogin (Associate Economist), June 2026 report