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Common debt difficulties

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In line with Australian’s consumer cautiousness over the past months, it seems many Aussies are finding it a struggle to repay debt. Veda Advantage’s bi-annual Australian Debt Study, released last week, reveals that while the majority (57 per cent) of people are managing their debts, some Australians admit to difficulty when it comes to their debt obligations.

According to the study, one in five, or 21 per cent, of those surveyed said they are finding it difficult to repay debt, with two per cent admitting they are unsure how they will make their next repayment. The figures show a dramatic increase of 19 per cent from six months ago. The current figures are similar to the number of Australians who struggled to repay debt during the height of the financial crisis (20 per cent in September 2008).

Despite the results, Veda Advantage’s Chris Gration says Australia’s overall debt situation is stable.

“The debt study shows most Australians are acting financially responsibly. The anxiety around future ability to repay bills remains high at 77 per cent. However, this has reduced significantly from 82 per cent 12 months ago,” says Gration.

“Despite this sober approach, almost three in every ten Australians who are looking to take on more debt are already in a position of financial hardship and this is concerning,” he says. “The introduction of positive credit reporting is vital to help those living on the financial fringe avoid a situation where cannot repay their debts. The Government needs to act quickly to prevent more Australians falling into a debt spiral.

Since September 2010, concerns over the rising cost of living has increased seven per cent. Forty-four per cent of respondents noted the main worry involves the rising cost of transport and petrol costs, which has risen 10 per cent in six months.

Published on: Tuesday, April 12, 2011

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