More Australian borrowers are now in favour of their lender(s) looking at their finances to help them manage hardship as one in two Aussies are struggling to make ends meet amidst the ongoing cost-of-living crisis, according to new WeMoney research.
The 2023 State of the Economy report, from financial wellness platform WeMoney in partnership with Experian, has found that there are 23% more borrowers seeking proactive monitoring of their financial situation across home loans, personal loans, credit cards, BNPL, and energy and phone plans in 2023, as compared to 2021.
Sixty per cent of borrowers now believe their credit provider should keep an eye on their financial situation to know whether or not they can meet their payments, while a further 44% said they would switch providers if offered proactive monitoring of their finances.
See the tables below.
Percentage of borrowers comfortable with credit providers monitoring their financial situation
|
|
2021 |
2023 |
Change (%) |
|
Home loan |
55% |
66% |
+ 20% |
|
Personal loan |
49% |
64% |
+ 31% |
|
Credit card |
52% |
63% |
+ 21% |
|
BNPL |
43% |
58% |
+ 35% |
|
Energy or phone plan |
35% |
47% |
+ 34% |
|
ALL |
47% |
60% |
+ 27% |
Percentage of borrowers that would switch to a credit provider that continuously monitors their financial situation.
|
|
2021 |
2023 |
Change (%) |
|
Home loan |
23% |
49% |
+ 113% |
|
Personal loan |
28% |
46% |
+ 64% |
|
Credit card |
29% |
46% |
+ 59% |
|
BNPL |
26% |
41% |
+ 71% |
|
Energy or phone plan |
24% |
40% |
+ 67% |
|
ALL |
26% |
44% |
+ 71% |
The WeMoney survey also found that 90% of Australians have been impacted by rising living costs. Worryingly, 40% will struggle to make repayments on their debts if interest rates continue to increase.
“It is clear the economic outlook is bleak for many Australians,” said Dan Jovevski (pictured above), CEO and Founder of WeMoney. “With everyday costs soaring, families have been forced to change the way they live and their plans for the future.”
Other key findings included:
“We’ve seen a shift in priorities as Australians struggle with the rising cost of living,” Jovevski said. “People are shunning homeownership and international travel in favour of growing their savings and looking for a new job that pays a better wage. The biggest movers are Gen Z, with one in four looking to change employment in the next 12 months.”
Jordan Harris, head of innovation at Experian A/NZ, said it was unsurprising that a quarter of Australians said they were experiencing financial or credit stress, given the higher cost of living, particularly essentials.
“Since January, average utility payments among WeMoney members rose by 79% and expenditure at the petrol pump by 40%,” Harris said. “We’ve also seen members cut back on discretionary spending with event ticket purchases down 15% and travel transactions down 20%.”
On the brighter side, the report revealed that Australians were turning away from credit cards and focusing instead on other financial products, like savings accounts, everyday expense accounts, and superannuation.
Jovevski said the current situation is not without hope.
“There are things Australians can do, like reduce spending where possible, prioritise savings, refinance debts, set up a budget, know your credit score, avoid debt products, keep an eye on the economy, and seek support when needed,” he said.
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