ASIC says that while millions of Australians face financial hardship, many do not reach out for help.

New research from ASIC’s Moneysmart program has highlighted the significant financial struggles faced by Australians. 

The findings reveal that over 5.8 million Australians have struggled to make debt repayments in the last 12 months, with cost of living pressures, reduced income, and unexpected expenses cited as the primary reasons.

Despite these challenges, a substantial number of Australians are not seeking financial hardship assistance from their lenders. 

The research indicates that 30 per cent of those struggling would prefer to sell their belongings or take on additional work rather than request help from their banks or lenders.

“For many Australians, the path to seeking help feels daunting, confusing, and challenging. It is concerning that people would rather sell their personal belongings or get a second job rather than seek financial hardship assistance,” ASIC Commissioner Alan Kirkland said.

The research also uncovered a lack of awareness among Australians regarding their entitlement to request financial hardship assistance. 

More than half (55 per cent) of respondents were unaware of this right, and only 20 per cent had ever sought such assistance. 

Practical barriers, including a lack of awareness about available assistance programs (37 per cent), not knowing where to go for help (33 per cent), and not knowing which sources to trust (31 per cent), were identified as significant hurdles.

Emotional barriers also play a critical role, with 51 per cent of those in financial hardship experiencing anxiety and stress, 40 per cent feeling shame or embarrassment, and another 40 per cent feeling a sense of failure. These emotional factors contribute to the reluctance to seek help.

The impact of financial hardship is not limited to financial stress. Almost all respondents (96 per cent) reported negative side effects, including stress or anxiety (73 per cent), loss of sleep (56 per cent), and a decline in physical health or appearance (41 per cent).

Among those hesitant to seek financial hardship assistance, 50 per cent worried it would cost them more in the long run, 32 per cent feared it would negatively impact their credit scores, and 31 per cent doubted that their lenders would be of much help.

In response to these findings, ASIC’s Moneysmart is launching an awareness campaign titled ‘Just Ask! Hardship Help is available’. 

This campaign aims to encourage Australians facing financial difficulties to contact their lenders and request assistance. 

The campaign coincides with the release of ASIC’s report, ‘Hardship, hard to get help: Lenders fall short in financial hardship support’, which calls for lenders to improve their processes for supporting customers in financial hardship.