Australian Debt Crisis Reaches Six-Year High, Record Number of Citizens Seeking Support
The National Debt Helpline has reported a record 168,000 individuals seeking assistance in the 2024-25 financial year, marking a six-year high in debt-related distress.
Financial Stress Drivers
The key contributors to Australians’ financial woes include housing stress, encompassing mortgage repayments, rent rates, and strata or body corporate costs.
Utilities such as electricity, gas, and water costs, as well as problematic credit card debt, personal loans, and tax office debts, are also significant concerns.
Notably, the current financial stressors differ from those experienced in 2018-19, with rental stress, strata, and body corporate costs emerging as key pressures, whereas personal loans were not a major issue previously.
Seeking Help as a Last Resort
When Australians reach out to the debt helpline, it is often as a last resort, after exhausting all other options to manage their financial difficulties.
According to National Debt Helpline Coordinator Vicki Staff, individuals are typically in a highly stressed state, having tried their best to cope with the cost of living crisis.
No Respite in Sight
The debt crisis shows no signs of abating, with 15,000 people already seeking support in July for the new financial year.
However, there is hope that the Reserve Bank of Australia may lower interest rates, currently at 3.85 per cent, later in 2025, which could ease some pressure on households.
The National Debt Helpline offers financial counselling and self-help guides to provide options for individuals to overcome difficult financial situations.