New research reveals that nearly half (47%) of Australian adults in debt have faced difficulties with repayments over the past year, largely due to the increasing cost of living, reduced income, and unexpected expenses. Australians are now being strongly encouraged to seek financial hardship assistance directly from their banks or lenders. Despite these challenges, a nationwide study by ASIC’s Moneysmart program found that 30% of Australians would avoid asking for such assistance. Instead, many prefer to sell their belongings and assets (42%) or take on an additional job (40%) before seeking help.
ASIC commissioner Alan Kirkland expressed concern about this trend, stating that many Australians find the process of seeking help intimidating, confusing, and challenging. He stressed that individuals should not feel pressured to sell personal items or take extra work when they have a legal right to request financial hardship assistance.
Kirkland also underscored the responsibility of banks and lenders to support customers in financial distress. He advised those unhappy with their bank or lender’s response to file a complaint and, if needed, contact the Australian Financial Complaints Authority.
Barriers to Seeking Help
The research identified significant barriers to seeking help, with
- 55% of respondents unaware they could request financial hardship assistance – and only 20% having ever done so.
- Practical obstacles include a lack of awareness of 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 effects, including stress or anxiety (73%), loss of sleep (56%), and a decline in physical health or appearance (41%).
Among those reluctant to seek hardship assistance,
- 50% worried it would cost them more in the long run,
- 32% feared it would negatively impact their credit scores,
- and 31% doubted their lender’s willingness to help.
Seeking Help
In response, ASIC’s Moneysmart is launching an awareness campaign titled “Just Ask! Hardship Help is Available,” encouraging Australians in financial difficulty to contact their lenders for support. This campaign follows the release of ASIC’s report “Hardship, Hard to Get Help: Lenders Fall Short in Financial Hardship Support,” which found that lenders need to improve their support for struggling customers. ASIC is working with lenders to enhance their processes for assisting customers in financial hardship.
Here at UFinancial, we are committed to helping you navigate financial difficulties. If you’re struggling with your debt repayments, or want to get on top of your finances, don’t hesitate to reach out to us for support and guidance. Our team is here to assist you in finding the right solutions to manage your financial stress. Contact one of our UFinancial team members today and let us help you take the first step towards financial stability.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent. Content developed in partnership with IFPA.
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