Aussies urged to manage their finances
4 December 2008
Young males in New South Wales, Victoria and Queensland are increasingly finding themselves in trouble with debt, according to new figures released today by Dun & Bradstreet.
The debt study, which examines September quarter 2008 debt figures, reveals the demographics of Australians that are feeling the greatest impact from a tougher economy, rising prices and the fallout from the global credit crisis. The study shows:
- low value debts (<$400) account for more than 50% of referred debt
- males have higher average debt values than females
- young people (18-34) have the highest average debt values and account for the largest proportion of debt referred for collection
- consumers residing in NSW accounted for the highest average debt values and the largest portion of debt referred.
Average value of debt referred (by age)
According to Christine Christian, CEO of Dun & Bradstreet, it is concerning that young Australians are demonstrating signs of stress, particularly as we approach Christmas, a traditional boom time for spending.
"That more than half of all debtors are younger than 35 is a sign that this group in particular are experiencing significant debt stress," said Ms Christian.
"The current economic climate is making it increasingly difficult for consumers to manage their budgets and as we approach Christmas it is even more tempting to spend without thinking about the consequences.
"To avoid an increase in over-indebtedness in the New Year it is absolutely critical that consumers pay close attention to their finances."
Male vs. Female
Males incurred higher average debt values than females, a trend which has been consistent across the past two years. At more than $1,300, the average value of debt for men was 28% higher than their female counterparts. However the average value of the debt decreased by 1.2% for males as compared to the June quarter 2008 and 3.8% for females.
Age
Consumers aged between 18-24 incurred the highest average debt values, following an increase of 10.5% on the June quarter 2007. Younger Australians also account for the largest proportion of referred debt, with those up to 34 years old accounting for more than 50% of debt referred.
Meanwhile those aged 65 and over incurred the lowest average debt values despite an increase of 4.5% on the previous quarter. This demographic is also the most likely to repay their debts.
All age groups increased their average debt value as compared to the June quarter 2007.
State
Consumers residing in New South Wales, Victoria and Queensland accounted for the largest proportion of referred debt, with a combined total of close to 80%. New South Wales consumers also incurred the highest average debt values at close to $800, following an increase of 18% since the June quarter. Residents in Northern Territory incurred the second highest average debt values, following a 66% increase.
South Australian residents had the lowest average debt values however the value still increased by 14% to reach close to $700.
Low value debts
More than 50% of debt referred for collection in the September quarter was for values of up to $400. Separate research by Dun & Bradstreet shows that consumers who default on low-value amounts (less than $400) are just as likely to default again as consumers who fail to pay up on significant sums of money.
"Low value debts are a cause for concern and need to be taken seriously," said Ms Christian.
"Defaulting on a $400 bill demonstrates that consumers are in very serious trouble or they don't fully understand the consequences of missing payments.
"Consumers should take note. Not paying a small bill, such as a phone bill, can negatively impact a consumer's ability to access credit for up to five years. Every credit commitment must be taken seriously."
For further information please contact:
Danielle Woods
D&B PR Manager Australia & New Zealand
(02) 8270 2926
About D&B
D&B is the world's leading provider of business-to-business credit, marketing and purchasing information and receivables management services. D&B manages the world's most valuable commercial database with information on more than 130 million companies.
Information is gathered in 193 countries, in 95 languages or dialects, covering 186 monetary currencies. The database is refreshed more than one million times daily as part of D&B's commitment to provide accurate, comprehensive information for its more than 150,000 customers.
The Australasian operations were bought out by the senior management group in August 2001. It was the first MBO of a wholly owned subsidiary in D&B's history worldwide.
Today Lazard Carnegie Wylie owns an approximate 90% stake in DBA and the local management team a 10% stake.
Strategies for future growth include developing DBA's commercial and consumer credit referencing business; expanding its receivables management outsourcing business; maintaining its lead in the development of unique credit and risk scoring products; and developing new products specifically tailored to the Australasian market. DBA currently employs over 500 people in Australia and New Zealand.
