Financial Hardship – Many Australians Are Experiencing Financial Hardship

The Global Financial Crisis has proven so devastating in terms of the financial hardship it has caused that it has earned itself its own acronym – the GFC. Whilst the US is seen as suffering perhaps the worst of all, there are few places that have been immune, and Australia certainly has not escaped the consequences.

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Insights into the financial hardship of Australians:

A recent report in The Sunday Telegraph reveals that, as a result of the current economic crisis, over 55,000 Australians have been granted mortgage holidays or hardship concessions in the past year due to financial hardship. At least 31,000 hardship applications have been lodged since February. Westpac, St George, ANZ, National Australia Bank, BankWest, ING Direct and Citibank are the banks that have contributed to the figures, but there are others, like the Commonwealth Bank, that are keeping quiet, meaning the actual figures are higher still.

One hundred and forty-one banks have signed up to the government’s financial hardship principles since April, which are designed to help homeowners in dire straits. The idea is to allow families a little more time to recover their finances and avoid repossessions. However, it did not taken any government intervention to prompt certain banks into action, as some had been making such allowances for a year already, including Westpac and St George. These two banks have between them granted 41,000 hardship concessions in the past year, with Westpac granting 15,000 since February.

BankWest has helped nearly 10,000 customers through financial hardship since January, and 3,300 ANZ mortgages have been deferred. Anything from a third to a half of these hardship grants have gone to residents of New South Wales.

Breaking the figures down a little, 37% of ING hardship applications cited unemployment as the cause of the problems, with over 20% requesting a deferral for six months, and nearly a third seeking one for three months. 12% asked that they be able to pay off only their arrears.

Citibank has reported a 300% rise in financial hardship cases in the past eleven months compared to the previous year, but has given assistance to less than 1000 families.

NAB says that their financial hardship cases have doubled since April.

Offering a snippet of good news, however, is Westpac spokesman David Lording, who has said that over 80% of Westpac customers are actually ahead on their mortgage payments, despite the bank having to offer assistance to other families on their books.

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