The number of Aussies under financial stress is at a three-year high, as households struggle with the rising cost of living and interest rate hikes.
A new NAB survey of 2,000 Aussies found 40 per cent of people were experiencing some form of financial difficulty.
This is the “highest number since the start of the pandemic”, the major bank said, and it includes those struggling with paying bills, covering rent or mortgage payments, paying for food and basic necessities, and having money for emergencies.
“We know most of our customers are in good shape but, for some Australians, financial difficulty might be an entirely new experience as rising cost of living places increasing pressure on their personal finances,” NAB executive Mark Baylis said.
One in five (21 per cent) said they didn’t have enough money for emergencies, 16 per cent were unable to cover food or basics, and 14 per cent couldn’t pay a bill.
Despite rising interest rates, only 5 per cent of Aussies said they were unable to meet their mortgage repayments.
Young Aussies were facing the most financial stress, with more than half (57 per cent) of those aged 18-29 having experienced financial difficulties. Aussies living in rural and regional areas, as well as low-income earners, were also under increased pressure.
“Financial hardship can happen at any time, and is often the result of sickness, job loss or over-commitment,” the report noted.
“Rapidly rising interest rates and cost of living are now also causing financial distress in more households.”
The cost of living rose 7.4 per cent in the year to January, the second-highest annual increase on record from the Australian Bureau of Statistics.
The Reserve Bank of Australia is expected to raise interest rates when it meets on Tuesday, with economists largely predicting another 0.25 per cent hike.