Some Australians Vulnerable to Mounting Debt

Veda Advantage
There seems to be a debt burden on Australians which might just be the straw that breaks the camel’s back.

According to Veda Australia, “The Australian Debt Study Report by Galaxy Research found 16% of Australians are having difficulty repaying debts and 21% of those who are likely to apply for credit over the next six months say they are currently having difficulty paying debts.”

Veda Advantage's report indicates:

• More than one in ten (12%) of Australians have missed a required minimum payment in the past three months, with many missing two or more essential household payments. Of the people likely to apply for more credit, one in five (18%) have missed a bill payment in the last three months.
• Of those Australians with a mortgage, 13% were late paying a household bill in the past three months. One in three respondents is concerned interest or mortgage rates will impact on their ability to repay debts during the next twelve months.
• Mortgage holders aged between 25 - 49 years are three times more likely to miss a payment than those over 50 years. Mortgage holders were most likely to miss a telephone or Internet bill, followed by a mobile phone bill, credit card, utilities, and personal loan repayments.
• More than 20% of Australians currently struggling are likely to apply for more credit in the next 12 months.
• Although Australians experiencing financial difficulty aspire to pay off their credit cards, one in five is likely to apply for new credit in the next 12 months.
• Australian part-time workers are more likely than full-time workers to apply for new credit to consolidate existing debts.
• Australians currently finding it difficult to repay bills are more likely to have children and are more likely not to be working, or working on low incomes.
• Australians living in regional areas are worse off than their city counterparts.

Helping lenders prevent these families falling into a debt trap should be a high priority. But government legislation to allow lenders to see when a borrower is overcommitted is facing continued delays. "Australia needs to adopt a comprehensive reporting system.  There is a window of opportunity to introduce this change, however this requires swift action," Mr Evans said.

We at mrhomebudget.com believe Australians are facing increasing pressure from all sides. We must as householders track every dollar in the household budget, now more than ever.