Borrowing money has never been easier, but how deep in debt are we in? With economic conditions taking a serious toll, we explore the issue of bill stress.
The Australian debt level has never been so high with the current level at 35.2% GBP and projected to reach $940 billion as a nation by the end of 2025.
The 2024 Bill Stress Index not surprisingly revealed that Australians are more anxious about their bills than ever, with utility bills, mortgage repayments and rent topping the list of concerns.
A snapshot from recent research conducted by Finder for 2025 reveals as an economy Australia ranked very high at number three well ahead of the UK and USA for Household Debt levels, with the household average debt sitting at $261,492, home loan debt average a huge $655,978 and car loan debts at $13,000.
Australia hasn’t always been like this. We used to be one of the more financially conservative countries in the developed world. Whether you see this as a ticking time bomb or just a reflection of modern-day living costs, it makes you wonder: how much debt is the average Aussie really carrying?
Let’s be clear, not every Aussie is drowning in debt. In fact, the ABS found that around 36% of adults had no debt at all. This tends to include two main groups: older Australians who’ve paid off their home loans and live debt-free, and younger Aussies—mostly Gen Z—who haven’t yet taken on things like mortgages or car loans, likely because they can’t afford to. For the rest of us who remain in the majority there is still caution ahead for cost-of-living relief.
Cost of living relief
A recent survey from Canstar revealed that just one third of Aussies are optimistic about their financial future, mainly driven by the rising cost of living including food and housing costs. 20% of Aussies say grocery shopping inflation that has more than doubled in the last five years is their biggest concern, as well as rising insurance premiums and bills.
The other worry is the ongoing housing affordability including rising council rates, sky rocketing rents and despite the latest interest rate cut mortgage repayments are still high for most people.
The rising tide of bill stress
The latest bi-annual Bill Stress Index revealed that people are unsurprisingly struggling to manage their money in an environment where everyday costs are still rising. Shifting trends across age and income brackets were seen, with younger Australians particularly affected by rent. While younger Australians often carry less debt, this may be more due to circumstance than choice. Many live pay check to pay check, hesitate to take on loans, and sometimes skip meals just to cover basic bills.
Low-income earners are under significant bill stress right now, with 52% admitting that they paid a bill late in the past 12 months. Compared to the average Australian, they are also 32% more likely to have to cut back on groceries in an effort to manage bills.
The Salvation Army recently released findings that paint a concerning picture:
- 30% of Australians struggle to create a budget.
- 15% don’t understand how (credit card or BNPL) interest works.
It’s possible that a lack of financial literacy may be contributing to the growing personal debt crisis, as without a clear understanding of income versus expenditure, it’s easy to lose track—and control. Reliance on credit has increased this year, with 40% of Aussies using a credit card to either pay a bill, avoid steep late payment fees or purchase essentials such as food and petrol.
Trevor Greenhill from Cloud Payment Group said he was most concerned that 37% of Australians expected they would not be able to pay at least one regular bill or loan payment this year.
“We’re in one of the worst cost of living crises in recent history, and unfortunately, we know there are many people who ignore that bill or loan repayment, knowing they probably won’t be able to pay. I urge people to get on the front foot and contact them before they send you that debt collection notice and you lose your good standing. If you find that too confronting, the National Debt Helpline is a great resource to help you navigate these challenges.”
Cloud Payment Group is one of Australia’s leading providers of debt collection and payment management services, with over 50 years of industry expertise.