Mortgage and utilities costs are among multiple factors compelling a record number of Australians to contact the National Debt Helpline in the past financial year.
The service received over 168,000 requests for help in 2024/25, the highest number of calls and chat messages since 2018/19, and the demand shows no sign of diminishing.
“It’s really telling us that people are struggling more than ever,” said helpline coordinator Vicki Staff.
The majority of calls relate to housing stress, which includes mortgage repayments, council rates, rent, and strata or body corporate costs.
Paying for utilities such as electricity, gas, and water is problematic for many, as well as credit card and personal loan debt, and payment demands from the Australian Tax Office (ATO).
The pattern isn’t homogenous, however, with people in each state and territory having the same problems, but in different orders of magnitude.
“You might find that in one state, utilities are actually coming through as the number one presenting issue, and then maybe housing number two,” Staff said.
The current financial issues also differ from those experienced in 2018/19 when rental stress and strata and body corporate costs were not reported as key pressures. Personal loans were also not a predominant issue at that time. Instead, it was “buy now, pay later” schemes that were burdening Australians.
Staff said that when people call the debt helpline, it’s usually when they believe they have exhausted all their other options to solve their financial woes.
“People have really done their best ... to cope with this cost of living crisis, but eventually they get to a point where they can’t think of what else to do,” she said. “It seems pretty insurmountable. They’re usually in a highly stressed state.”
The debt crisis shows no sign of slowing, with 15,000 people already seeking support in July of the new financial year. If that rate continues, the current year will see another record.
There is hope the Reserve Bank of Australia will lower interest rates—currently at 3.85 percent—later in 2025, which would ease some pressure on households paying mortgages and perhaps some renters whose landlords pass on the savings.
There are suggestions the central bank will reduce the official cash rate (OCR) by 25 basis points when it meets next week.
The average Australian household had a debt of $261,492 as of December 2022, according to the most recent data from the Australian Bureau of Statistics (ABS).
This is equivalent to a national total of $2.66 trillion in household debt, based on the number of households included in the ABS data.
As of 2024, the total amount owed by Australian households exceeds 110 percent of GDP. Australia used to be one of the most conservative developed nations in terms of people’s willingness to take on debt, but now has one of the highest national debt-to-income ratios.
