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While younger Australians tend to have higher debt, a recent survey suggests a higher share of older Australians see debt as an inhibiting factor in life.
Latest ABS data show that households with a reference person aged 25-34 (33%) and 35-44 years (34%) were more likely to be indebted as of 2015-16. They stand in stark contrasts to households with a reference person aged 65 or more (5%), and those aged 55-64 (less than 20%).
According to a survey by Debt Rescue, it was Australians aged 55 years-old and over who said debt stopped them from achieving their life goals more than those grouped as generation X or millennial.
This could be due to younger generations perceiving other factors, like mental health, as negatively affecting them more than debt, the firm said.
When taken as a whole, four in 10 Australians said not earning enough money was the top reason them not being able to achieve their life goals – but that does not necessarily free you from debt. ABS figures also show that high income households were also more likely to be over-indebted. One quarter of the households in the top income quintile were over-indebted compared to one-in-six (16%) low income households (in the bottom 20%).
“Over recent years, rising property prices, declining interest rates and easier access to consumer credit has seen Australian households grow more comfortable with debt. However, high levels of debt, when considered against the value of current household income and assets, indicates vulnerability in the event of an economic shock, such as increases to interest rates, the loss of a job, illness or injury, a change in family circumstances or a drop in asset prices,” said the government office.
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