Rising interest rates, escalating food costs and increasing living expenses have got Aussies concerned about money - but according to a new report, we're less stressed about debt than we were six months ago.
Veda Advantage’s bi-annual Australian Debt Study*, released this week, revealed that the majority of Australians are managing their debt effectively.
Among those with a credit facility, 62% consider their debt to be within their budget, said Chris Gration, Head of External Relations at Veda Advantage.
And while 17% of Australians are finding it difficult or are unsure of how to meet their next repayment, he said this figure had dropped since the last survey in March.
“The level of people struggling to repay their bills is down from 19% in March 2010, but it remains higher than the 15% of Australians struggling in September 2007, when the first study in the series was conducted,” Gration said.
The study showed that 75% of Australians are worried about their ability to repay debt over the next 12 months, and although this figure is high, it has dropped sharply from the 82% high that was recorded in March 2010.
Around 12% of survey respondents admit to having missed a minimum bill repayment in the past three months, which is on par with March 2010 results. The most commonly missed bills are utilities – such as telephone, internet, gas, electricity and water – credit card and mobile phone.
Of those who had missed a repayment, one in ten (11%) are looking to take on more debt in the next six months.
“While the majority of Australians are practicing good financial practice, the fact one in ten Australians are looking to take on more debt despite being in a position of financial hardship is concerning,” Gration said.
Overall, the Australian Debt Study found that more than one million Australians are planning to apply for credit in the next six months – with around 44% of survey respondents earmarking this potential new credit for property purchases.
Purchasing property was the primary reason Australians owed more money now than they did six months ago, increasing dramatically from 22% in March 2010, to 43% in September 2010.
Gration said the new positive reporting reform, which is currently being drafted by Government, aims to help protect vulnerable Australian families from over-committing themselves financially.
“Responsible lending regulations, which will come into effect on 1 January, are a huge step forwards in consumer protection,” Gration said.
“However, the system remains flawed because lenders don’t have access to all the information required.”
* The Australian Debt Study Report is conducted bi-annually by Galaxy Research Omnibus telephone study on behalf of credit reporting agency, Veda Advantage. This is the 7th indexed report in the nationally represented series, which interviewed 1,052 Australians.