Survey finds many unable to pay rent and bills on time
More than one-third of Australians are dealing with some type of financial hardship, including being unable to pay rent or bills on time, according to research by National Australia Bank.
The NAB financial hardship survey polled 2,050 Australians between August and September, according to a report by The Australian. The survey found that 36% of respondents had experienced financial hardship in the last three months.
Mark Baylis, NAB personal banking executive, said the survey findings were in line with what customers – including mortgage borrowers – were telling the bank’s assistance team.
“Most of our customers are in a good financial position, but there are some pockets of concern,” Baylis told The Australian. “Banks have a critical role to provide support to home loan customers finding the increasing interest rates challenging. While 70% of home loan customers are ahead on their repayments, I encourage anyone concerned to speak to their bank early.”
Financial hardship was most prevalent in Western Australia (45%), South Australia and the Northern Territory (38%), and VIctoria (37%), the survey found.
NAB’s results come after the Reserve Bank conceded last month that inflation and climbing interest rates would make it difficult for some people to repay their debts, The Australian reported. The central bank said there was a small group of borrowers who could fail to make debt payments because of low savings and high levels of debt.
“Financial stress could be more widespread if economic activity turns out to be much weaker than expected,” the RBA said. “Higher interest rates will increase borrowers’ debt payments. Despite a strong labour market, income growth has not kept up with inflation in Australia, leaving households with less capacity to service their debts.”
The central bank predicted that households would keep above water by reducing their spending or their rate of saving.
“Housing loan arrears rates are likely to increase in the period ahead from currently very low levels,” the RBA said. “Debt-servicing challenges will become more widespread if economic conditions, particularly the level of unemployment, turn out to be worse than expected and housing prices fall sharply.”
