By Barrett Hasseldine MICM, Head of Modelling, illion, an Experian company
The March 2025 Australian Consumer Stress Barometer from illion, an Experian company, has revealed a mixed picture.
While overall the Barometer suggests default risk has stabilised, the findings suggests a potentially widening gap between financially secure and vulnerable consumers. A decline in insurance coverage and the growing reliance on short-term credit suggests the possible financial strain a significant portion of the population might now be facing.
Credit Stress Index based on consumer credit behaviour - Percentage change in the Consumer Default Risk since January 2022
A two-tier economy appears to be emerging, with significant differences in financial stress levels between different consumer groups.
A two-tier economy appears to be emerging, with significant differences in financial stress levels between different consumer groups.
Change in Credit Default Risk over 2024 (by age group)
After rising in the September quarter, mortgage stress has now plateaued. However, this may mask underlying issues as stricter lending criteria exclude lower-income borrowers.
Change in 30+ DPD arrears by credit product - Average in Q4 '24 to Q4 '23 ; Q4 '23 to Q4 '22
Risk is increasing among personal loan holders, particularly renters and younger borrowers facing rising rental costs and fixed interest rates.
Percentage change in credit default risk over 2024
Buy Now Pay Later (BNPL) spending continues to rise, indicating consumers are relying on short-term debt to manage expenses.
32% increase in the use of BPNL services in 2024.
Consumers are reducing spending on health, car, and home insurance, potentially exposing themselves to significant financial risk in case of emergencies.
Change in real spending (consumption) on Insurance and Medical Services– (Nov 2024 Year-on-Year)
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New South Wales
Queensland
Queensland
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