Person sitting alone in a public park, symbolizing the link between financial hardship and loneliness.
Nubelson Fernandes/Pexels

In this Article:

  • How does financial hardship drive loneliness?
  • What are the health risks associated with persistent loneliness?
  • What is the impact of loneliness on social anxiety and depression?
  • How can society tackle the rising loneliness crisis?
  • What are low-cost ways to stay connected while facing financial pressure?

How Financial Hardship Leads to Loneliness and What to Do

by Michelle H Lim, University of Sydney.

One in four Australians report feeling lonely, according to our new report released this week from our research collaboration.

The data builds on a large study we conducted last year on social connection. Together, the data show that once someone becomes lonely, they’re likely to stay lonely.

Feeling lonely can have a negative impact on your health. It increases the chance of having social anxiety and depression, and impacts the health of your heart, your sleep and levels of inflammation. It also increases the likelihood of an earlier death. Staying lonely can accelerate these negative impacts.

As more Australians grapple with a cost-of-living crisis, a key driver of loneliness is financial hardship.


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Am I lonely?

Loneliness is a negative feeling that arises when your social needs are not met by the relationships you hold. So you can feel alone, even if you’re surrounded by others, if you’re not getting the right kind of company and support.

This might mean you feel, to a certain extent, that:

  • you are not “in tune” with others
  • your relationships are not meaningful
  • you do not belong
  • you do not have a group of friends
  • no one understands you
  • you do not have shared interests with others
  • there is no one you can turn to.

Not all of these may relate to you and you may experience these in varying degrees.

What drives loneliness?

We found particular communities were more at risk of persistent loneliness:

  • those aged 18 to 24
  • people from culturally and linguistically diverse backgrounds
  • people who were single or divorced
  • those with a chronic disease
  • those with mental ill health.

But the largest effect we found, even after we accounted for all other possible contributing factors, is the impact of financial hardship.

People who face financial hardship were almost seven times more likely to report persistent loneliness, and almost five times more likely to report persistent social isolation, compared with people who did not face financial hardship.

This aligns with other studies that link economic hardships to poor health.

In children from low-income backgrounds, for example, their family’s economic hardship is one of the main factors that negatively impacts their physical and psychological health.

In a large study using the UK Biobank, people who are from a lower economic background had a higher probability of reporting loneliness.

In Australia, when compared with people on incomes more than A$150,000, those with incomes under $80,000 were 49% more likely to experience loneliness in one year and 66% more likely to report loneliness in at least two consecutive years.

Being poor affects how we interact with others

Factors such as income and your living environment are some of the social determinants of health, which influence our health outcomes.

However, to date, little has been done to examine exactly how the lack of financial resources negatively affects the way we interact with others. There are two plausible scenarios.

First, having financial pressures may change the way we feel and relate to others due to higher stress levels.

Second, financial pressures may stop us from socialising because we have to take on more work to earn more money or we try to cut costs to save money. Socialising can be free in some circumstances, but most of the time, there is a cost to getting to places, or doing an activity together.

What can we do as a society?

The high prevalence of loneliness across the world – and the growing scientific evidence of the negative impact on our health, wellbeing and productivity, and subsequently the economy – can no longer be ignored.

The World Health Organization is repositioning loneliness as a global public health priority and has established a Commission on Social Connection. This commission aims to set the global agenda for social connection, work with high-level commissioners to make the case for global action, scale up proven solutions and measure progress.

We need to start by building a culture of connection in Australia. This means changing the way we make decisions on how we relate to each other, promoting social connection within our schools, workplaces and communities. And to modify policies to allow us to start and maintain healthy social connections.

Health and social policies to address loneliness and social isolation have to consider the impact of low incomes and increased financial pressures as barriers to building and maintaining meaningful social connection.

Related to this is urban planning. People require safe and no- or low-cost spaces to interact in and to start and maintain relationships. This includes parks, libraries, public squares, community gardens and neighbourhood houses.

Cuts to building or maintaining these spaces will stop people from interacting, gathering, or socialising within their community.

Not addressing loneliness effectively or quickly will lead us to persistent loneliness and to potentially more distress.

How to connect if you’re financially pressured

Don’t feel alone in this experience. Let your family or friends know that you are financially pressured. Chances are, they are experiencing the same pressures because of the rise in the cost of living.

Select no- or low-cost activities such as walking in the park with a friend, or connecting on the phone. Look for free events offered in your local area and city.

Consider having meals at home as opposed to going out, or low-cost food options. Find some digital spaces which can allow you to interact with others in shared interest topics.

If someone shares they are feeling lonely, asking “is there anything I can do to help?” facilitates the conversation and lets others know you are there without judgement.

Michelle H Lim, Associate Professor of Psychology, University of Sydney

Article Recap

Financial hardship is a significant driver of loneliness, leading to social isolation and impacting mental and physical health. As more people struggle with the cost of living, social interaction becomes limited, which only worsens feelings of loneliness. The article explores how financial struggles change how we connect with others and provides practical advice on maintaining relationships without increasing financial burden.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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