Two Million Australians Financially Vulnerable

A new report into “financial resilience” reveals that two million Australians are experiencing a high level of financial stress or vulnerability.

The Centre for Social Impact (CSI) report Financial Resilience in Australia 2015, commissioned by National Australia Bank, highlights the concept of resilience as a process that “enables individuals to bounce back after adverse events and experiences, adapt to changing circumstances and deal with environmental stress”.

The report defines financial resilience as “the ability to access and draw on internal capabilities and appropriate, acceptable and accessible external resources and supports in a time of financial adversity”.

Research director at the Centre for Social Impact Professor Kristy Muir said over the past five years CSI and NAB have worked in partnership to understand the level of financial exclusion in Australia.

“Over the past year, the two organisations have sought to redefine thinking beyond access to products and services and to provide a more robust and holistic approach to defining and measuring the level of financial health in Australia,” Muir said.

“To write this report, we surveyed a representative sample of the Australian population and what we have found is alarming – two million Australians are financially vulnerable, and people most likely to fare worse are people living in social housing, with mental health challenges, and / or English as a second language or who don’t speak English at all.

“We know that just over 64 per cent of Australian adults are facing some level of financial stress and vulnerability and that one in four people have experienced difficulties accessing financial services in the past 12 months.

“We have redefined thinking around financial inclusion and developed a comprehensive model of resilience that can be applied across the entire population – because financial shocks can happen to anyone, anywhere, at any time.

“This gives us a much deeper understanding of people’s financial situations, the resources they need to withstand adversity and who in the population fares better or worse – and why.”

Muir said understanding financial resilience provides a clearer understanding not just for individuals, but for socially responsible businesses, government agencies and policy makers, and anyone working with a mission to improve social outcomes, to identify where people are at risk.

The Centre for Social Impact is a collaboration of three universities – UNSW Australia, Swinburne University of Technology, The University of Western Australia.

Pro Bono Australia’s upcoming free webinar on Wednesday, 14 September 2016 will discuss the ground-breaking research by NAB and the Centre for Social Impact, and provide a deeper understanding of people’s financial situations.