This Christmas will put personal finances to the test, with the latest Dun & Bradstreet Consumer Financial Stress Index showing financial stress in Australia has stabilised near a two year low.

According to D&B, the financial position of Australians has settled in the past two months due to the combination of post-election confidence, low interest rates and increased savings. The Consumer Financial Stress Index moved to 11.8 points for September, a slight increase on the 11.5 points in August.

Despite easing to healthier levels this year, D&B has warned there’s a risk financial stress may rise in the lead up to the Christmas holidays as consumers often accrue debt during the period so repayments may be a problem in the New Year.

This was evidence in January this year where the Consumer Financial Stress Index reached 24.9 points — its highest point in the three-and-a-half years of the index as a greater number of consumers with a poor repayment history applied for new credit and the economy struggled to generate momentum.

Although financial stress was relatively unchanged across Australia in September, it remains high in New South Wales and Victoria where high property prices place a greater debt burden on residents. In New South Wales the Consumer Financial Stress Index eased to 21.6 points in September, down from a high of 32.2 in January. In Victoria the stress index has fallen across the first eight months of 2013, dropping from 29.6 points in January to 16.6 points in September.

“This year’s fall in consumer financial stress no doubt reflects the very low level of interest rates, while moderate wages increases and the still favourable economic conditions have also assisted,” said Stephen Koukoulas, Dun & Bradstreet economic advisor.

“That said, the fact that the financial stress measure remains well above the level of two to three years ago is no doubt linked to the recent softening in the labour market which has seen the unemployment rate edge up to 5.8 per cent from around 5 per cent at that time.

“While the recent lift in property and share prices is no doubt helping to boost wealth, there is a clear link between house prices, household debt and consumer financial stress.”