A new study shows that two million Australians are under extreme financial stress and don’t have the resources to cope in increasingly difficult economic circumstances.
Many young Australians find themselves in financial crisis, a new report warned, that places many in a critical position with limited support and options.
The report produced by Financial Resilience in Australia quantified the amount of Australians experiencing problems paying debts, meeting the costs of living and accessing viable and affordable financial products and services.
The findings highlighted the link between social isolation and lower financial resilience. It noted that one in five have limited or no social connections and one in 30 stated they needed but did not have access to any form of government or community support.
Of those who sought out financial services, one in four reported difficulties accessing support mechanisms. The barriers were varied, but included cost, trust, poor and inadequate services. A minority also experienced language, disability and discrimination related issues.
Those who command the highest financial resilience, it comes as no surprise, were individuals who owned their own homes, have a university-level education and earn a personal yearly income of over $100, 000.
The report notes, ironically, that this accounts for only 35.7 per cent of Australians.
These findings are a timely response to social sector leaders who are currently lobbying the government to abandon proposed budget cuts that will in turn reduce the amount of certain welfare payments.
The findings reflect a reality where those most vulnerable and have the least resilience to bounce back financially after an unexpected event, would suffer the most from loss of welfare payments.
It also raises issues of addressing the current social and welfare mechanisms available to young people.
On the conclusions of this report The Conversation reflected, “This underscores the importance of making financial information, products and services more user-friendly and accessible.”
It seems that the key to understanding financial resilience is accounting for circumstances that lay outside an individual’s control.
“By understanding the often interrelated elements of financial resilience, tipping points and who is most at risk, prevention and intervention can be better tailored.”