Millions of Australians are struggling with debt amid the cost-of-living crisis but refuse to ask for help from their bank or lender, a new report says.
ASIC’s Moneysmart research says 47 per cent of Australians with debt – the equivalent of 5.8 million people – have struggled to make repayments in the past 12 months.
Reduced income, unexpected expenses, and cost of living pressures were the chief reasons cited.
Millennials and parents of young children were among the worst hit.
More than half (54 per cent) of millennials say they are likely to experience financial hardship in the next 12 months, compared to 39 per cent of Generation X respondents, and 31 per cent of baby boomers.
And 56 per cent of parents with children under 18 say they’ve been put through the financial wringer in the past year.
However, just one in five said they had sought financial assistance, with more than half (55 per cent) of those surveyed saying they didn’t even know they were able to.
Thirty per cent of respondents said they wouldn’t seek help on principle, fearing it would cost them more in the long run, or that their lender would do little to help.
Many would either sell their possessions (42 per cent) or get a second job (40 per cent) to make ends meet.
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The researchers found there were both practical and emotional barriers to seeking help.
Thirty-seven per cent of respondents weren’t aware of available assistance, a third (33 per cent) didn’t know where to start looking, and 31 per cent said they didn’t know who to trust.
Emotionally, stress and anxiety (51 per cent), shame and embarrassment (40 per cent) and feelings of failure (40 per cent) also nudged people away from seeking help.
Moneysmart is launching a new campaign, “Just Ask! Hardship Help is available” in response.
“It is concerning that people would rather sell their personal belongings or get a second job rather than seek financial hardship assistance,” ASIC commissioner Alan Kirkland said.
“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 lenders, including banks, had a responsibility to offer financial support to people struggling with debt.
“If you aren’t happy with your bank or lender’s response, make a complaint and, if that doesn’t resolve the issue, contact the Australian Financial Complaints Authority,” he said.