One third of Australian mortgagees are prepared to miss a mortgage repayment if money gets tight, while 41% say they have paid at least one bill late in the last 12 months.
The new data comes from Dun & Bradstreet’s Payment Priorities Study, which surveyed 1205 adults during February.
While mortgages are generally considered the highest payment priority for households, it seems mobile phone, credit card and utility bills are actually the most important.
The survey shows that 31% of mortgage payers say a housing repayment is the most likely bill to be missed if things get tight, while just 14% said they would miss a payment on the credit card bill and 15% would miss a payment on their internet bill.
The study also shows that overall, 41% of Australians say they have missed on bill in the last 12 months, while 7% of mortgage holders says they have made one late payment in the same period.
But 57% of respondents say that if they were aware a late payment would be listed against them on a credit report, it would make them more likely to pay their bills on time.
D&B chief executive Christine Christian says the study shows how some households are shifting their priorities from mortgage payments to more “absolute essentials”.
“That nearly a third of mortgagees would be prepared to make a repayment late
challenges accepted orthodoxy and points to new priorities for Australian consumers”, she says.
“Australians consider mobile phones and utilities as daily essentials, and will strive to pay these bills when they fall due. While the mortgage is considered extremely important, the study finds that when push comes to shove Australians are prepared to miss a payment to ensure they have free cash for their daily essentials.”
Christian also says the study shows how businesses can improve the chances of getting paid on time by ensuring customers understand the impact of late payments.
About 68% of respondents who paid a bill late preferred to be contacted by letter, while 16% said an email would be a better option.
About 47% of customers preferred the use of a savings account through the internet to pay late bills, while only 15% preferred to use a post office.
“Listing delinquent payments on a credit report and making the customer aware this will occur is a clear motivator for bill payment,” she says.
“The study finds that if early payment is rewarded, Australian consumers will respond accordingly. In an environment when improving business cashflow is critical, the Government has a real chance to contribute to improving bill payment by allowing credit reports to record additional pieces of information.”
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Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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