The research published by ASIC’s Moneysmart program has found 30% of Australians saying they would not seek hardship assistance from their bank or lender
Australians are being urged to directly seek financial hardship assistance from their banks or lenders, as new research has found that around half or 47% of Australian adults with debt, equating to 5.8 million people, have struggled to make repayments in the past 12 months due to cost-of-living pressures, reduced income, and unexpected expenses.
Despite these challenges, the nationwide research published by ASIC’s Moneysmart program has found 30% of Australians saying they would not seek hardship assistance from their bank or lender. Instead, they would prefer to sell belongings and assets (42%) or obtain a second job (40%) before applying for such assistance.
For many Australians, the path to seeking help feels daunting, confusing, and challenging, said ASIC commissioner Alan Kirkland. It is concerning that people would rather sell their personal belongings or get a second job rather than seek financial hardship assistance.
Customers in hardship are entitled under the law to request assistance. These findings should be top of mind for lenders when supporting Australians in financial hardship, Kirkland said.
He emphasised that banks and lenders have a responsibility to support customers experiencing financial stress.
If you are not happy with your bank or lender’s response, make a complaint and, if that does not resolve the issue, contact the Australian Financial Complaints Authority, Kirkland added.
The research underlines significant hurdles to seeking help, with 55% of respondents unaware they could request financial hardship assistance and just 20% having ever done so. Practical barriers include a lack of awareness of available assistance programs (37%), uncertainty about where to seek help (33%), and distrust of sources (31%). Emotional barriers include anxiety and stress (51%), feelings of shame or embarrassment (40%), and a sense of failure (40%).
Almost all survey respondents (96%) who experienced financial hardship reported negative side effects, including stress or anxiety (73%), loss of sleep (56%), and a decline in physical health or appearance (41%).
Among those unwilling to seek hardship assistance, 50% feared it would cost them more in the long run, 32% worried it would negatively impact their credit scores, and 31% doubted their lender’s willingness to help.
