Financial stress is on the rise and it's a shared responsibility to do something about it

Money is critical. Even if you’re not driven by money, it can determine where you live and the choices you’re able to make. We also know that economies fare worse when there’s a bigger gap between the richest and poorest people in society.

Australia has enjoyed uninterrupted economic growth for the past two decades and this week’s ABS Household Expenditure Survey showed a slight decrease in income inequality. Yet that’s in stark contrast to the experiences of many people because financial stress and vulnerability is on the rise. More people are finding it harder to meet the costs of living and access the resources they need.

I’m proud to be a part of the team from the Centre for Social Impact that today released the Financial Resilience in Australia report in partnership with NAB.

Financial stress is on the rise in Australia. The report shows that one in eight adults in Australia, or more than 2.4 million people (12.6%) experienced severe or high financial stress during the past year, up from 11.1%. More than half (56.3%) felt some level of financial stress compared with 53.2% a year earlier. And less than one in three (31.2%) were financially secure, down significantly from 35.7% in 2015. This is despite the fact that on average people's level of financial knowledge and behaviour (e.g. saving and budgeting) significantly improved.

There is an urgent need for collaboration between business, government and the not-for-profit sector to address this issue. How do we identify people in financial stress, ensure effective supports are in place before stress occurs and provide accessible, affordable and appropriate assistance when it’s needed?

You can read more information about the report at www.csi.edu.au/financialresilience/ and also in an article in The Conversation: Income inequality may be declining but financial vulnerability is increasing.