High employment offsets cost of living concerns

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New NAB research shows record low unemployment rates are helping Australian consumers better cope with concerns around the cost of living.

While NAB’s Consumer Stress Index has increased for the second straight quarter to 56.4 pts in Q2 2022, from 55.7 pts in Q1, overall stress remains lower than a year ago (57.8 pts) and is well below the survey average (58.7 pts)*.

NAB Economists attribute the overall reading being below 2021 levels to the high levels of employment being experienced across Australia. The research showed that stress related to job security eased further to a four-year low of 41.4 pts.

NAB Group Executive for Personal Banking, Rachel Slade, acknowledged that there are some individuals who may be feeling the cost-of-living pressures.

“When we look at our customers, as a whole they are in a really good position right now – in fact 70% are ahead on their mortgage payments giving them financial flexibility,” Ms Slade said.

“We also know though that having job security is critical to relieving household stress – the high rate of employment in Australia right now is doing a lot to put people at ease.

“As a bank we’ve never been in a better position to help. The establishment of our NAB Assist team in 2016 together with some smart analytics means that we are able to quickly identify those customers who may need our help so we can get in touch with them.”

“There are many things we can do to help from discussing flexibility around home loan payments to providing tailored budgeting tools. And we are seeing many customers make their own adjustments – 40% of Australians are now creating and following a budget which is brilliant.”

NAB Assist is a specialised team at NAB designed to provide customers experiencing financial difficulty with additional care. NAB Assist has received international recognition, appearing in Fortune magazine’s “Change the world” 2016 list – the first Australian company to have been recognised for their work in financial hardship.

With the recent increase in interest rates, the NAB team offer the following considerations for customers looking at how to manage their home loan repayments:

  1. Consider an offset – linking an offset account to your variable rate home loan helps you pay off the loan faster
  2. Line up your costs – adjusting your repayments can help to manage your budget and align your direct debit on the same day you receive your salary. If you’re ahead and want to decrease your home loan repayments, talk to us so we can help you with that change
  3. Build in flexibility – fixing the interest on all or part of your loan can give a period of repayment certainty. If you split your loan between fixed and variable rate you will still have flexible features like offset available
  4. Take advantage of offers in the market – for example, you can claim $2,000 cash when you refinance your existing home loan to NAB.

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