Basic finances out of reach for 1 in 5 Aussies

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More than three million Australians lack access to critical financial services including transaction accounts, credit cards and basic home and car insurance, a new report has revealed.

Young people, migrants and people in low-paying work – earning between $20,000 and $25,000 per year – are the most at risk of being “financially excluded”, according to the report from the Centre for Social Impact (CSI) and NAB.

Many of these disadvantaged Australians are reportedly relying on pricey, short-term cash loans because they aren’t allowed access to mainstream banking.

The cost of living is a major factor, according to the report, which shows that the cost of these basic financial services is now more than $1700 per year.

“People are doing it tough,” NAB Personal Banking group executive, Gavin Slater told News Ltd. “We’re wealthy on average, but the average, I think, is misleading. House prices have put pressure on disposable incomes, there are a lot of people earning a relatively low wage and the cost of living has increased.”

“The fact there is a demand out for it [cash loans] in Australia shows that the mainstream banking system is failing these people,” he said. “It’s unacceptable in today’s society that people end up having to do that.”

The report shows that the cost of maintaining basic financial services has actually decreased slightly compared with last year.

RateCity shows there are 70 free transaction accounts and 26 free credit cards (those charging no ongoing fee or account-keeping fee) available in its database.

Yet the number of people excluded from accessing them is still increasing – around one in five Australians are now considered to be “financial excluded”, it found.

Cost is just one contributing factor to the financial exclusion, says CSI research associate and author of the report, Chris Connolly.

The level of documentation required to establish an account can be a hurdle, and many banks do not lend less than $5000 as a personal loan.

“Language and identification documents, a lack of financial literacy, geographical barriers, and employment arrangements such as ‘cash-in-hand work’ all contribute to growth in financial exclusion,” he said.

“Younger Australians and migrants are particularly marginalised. The casualisation of our workforce is compounding the issue, with increasing number of people engaged in low-paying casual, part-time or seasonal work.”

Once individuals gain access to basic financial services they’re often able to improve their overall financial position and ultimately enter the mainstream financial system, the report found.

There is an obligation for banks, governments, the corporate sector and community groups to improve financial inclusion, urges NAB’s Slater.

“Financial exclusion is a deep, complex issue,” he said. “It’s something the whole industry needs to tackle, if we’re going to achieve significant change.”

NAB works in partnership with the federal government and charity organisation Good Shepherd to reduce economic inequality and assist marginalised and disadvantaged Australians. Good Shepherd Microfinance provides financial services, such as no-interest loans, to people on low and limited incomes who may not otherwise have access to mainstream financial services, to help them become financially independent. For more information, or to apply for a loan through the loan scheme, visit

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