Samantha Donovan: A record number of younger Australians are asking for financial advice, according to new figures from the National Debt Helpline. The not-for-profit service that helps households control their budgets says people are struggling with rent, mortgage and energy bill payments the most. And councillors are warning the financial stress in the community is likely to worsen. Here's our business reporter, David Taylor.
David Taylor: On Adelaide's Rundle Mall, these young Australians say they're feeling the pinch.
Opinion: Things becoming more expensive is tougher for us because obviously we don't make much money. Just the price of, I think mostly food. We want to save up to buy a house and I think it is, it seems to be getting harder, but there is also, you've just got to kind of lower your expectations a bit.
David Taylor: And they're not alone in feeling the pain of the cost of living crisis. Financial councillor Mike Dunkley says he's experiencing his busiest time at the National Debt Helpline in Sydney's Surrey Hills.
Mike Dunkley: I've been on the NDAC for two and a half years and I reckon this is the busiest I've ever seen it.
David Taylor: Calls, he says, started ramping up late last year as higher interest rates started to bite.
Mike Dunkley: It's going to be three things usually. So number one, mortgages. Number two, lots of rent. And lately, I think for probably the last five or six months, it's the ATO.
David Taylor: The financial year just gone saw a total of 145,166 calls to the National Debt Helpline, the highest number of calls in four years. But those in financial distress can also use the helpline's online chat service. Mike Dunkley says the call centre's figures show so far this year, the number of chat users should soon surpass the total number of users last calendar year. Over 60% of chat users are aged between 18 and 39 and the majority are women struggling with paying the rent.
Mike Dunkley: And so rent, there's very few options for rent. There's no hardship provisions. There's nothing we can lean on with that. Basically, you're talking to the landlord, as you know. And so finding it difficult to find options for people who've got rent arrears.
David Taylor: A phone conference of financial counsellors last week found mortgage and rent stress ramping up across the country. Financial Counselling Australia CEO, Peter Gartlan.
Peter Gartlan: The amount of calls that are coming through this year are equivalent to 2020 figures, which is just prior to COVID. So what that says to us is for the financial year just gone, we had over 145,000 calls. This year, month on month, those calls are increasing. And as well as chat function and the demands generally on financial counsellors have gone through the roof in recent times.
David Taylor: Data from the big four banks and the Reserve Bank finds financial stress increasing, but not an alarming pace. For example, the RBA's latest financial stability review shows nearly all borrowers continue to service their debt on schedule. But Peter Gartlan doesn't think that analysis tells the full story of financial stress.
Peter Gartlan: What the banks are saying is that approximately 75 to 80% of mortgage holders are in front of their mortgage. What that means, of course, is that 20% are not. So we are seeing that those are the people that are ringing us. Our overall impression is that people aren't going to the banks simply because they're scared. And they're doing everything they can to avoid getting into arrears. And the way that they're doing that at the moment with a very strong employment market is either working extra hours or taking on a second job.
David Taylor: As for renters, well, the evidence points to their financial challenges mounting from here. Recent data from property analysis firm PopTrack showed national rental prices rose on average 10% last financial year. Domain's rent report for the June quarter shows that year on year rental price increases for combined capital cities of 11.1%.
Peter Gartlan: So we're just finding all around that these cost of living indicators are really biting.
David Taylor: Not to put too fine a point on it, but is it going to get better from here or worse, Peter?
Peter Gartlan: I wish I had a magic wand, David, to tell you that it's going to get better. The simple answer is we don't know. But we are finding that at the moment, at least, people are doing it tough. And there doesn't seem to be any light at the end of the tunnel.
David Taylor: The Reserve Bank next meets to make a decision on interest rates in early August.
Samantha Donovan: That report from David Taylor and Sarah Maunder.