![]() Good Shepherd CEO Stella Avromopoulos also welcomed the initiative, noting that the last twelve months have been especially difficult for women and families experiencing financial hardship. “We encourage customers who are in financial difficulty to call us as soon as possible so we can consider what options may work for their personal situation,” said Ms Fitzpatrick. “We will take a customer’s financial history into consideration and look to the future to work through multiple options to help get them back on track. “We hope the savings buffer will help customers avoid turning to higher interest products or pay day lenders to help pay off debts,” said Ms Fitzpatrick. Support measures may include payment deferrals, interest rate reductions, loan-term extensions, and referrals to financial counsellors. The new measure will be used in conjunction with Westpac’s existing hardship support in determining how Westpac can assist a customer. Interest will continue to accrue on the home loan. ![]() The savings buffer is a short-term strategy to help customers manage their finances. Westpac’s team of experienced hardship consultants will work with each customer individually to determine the amount they can free up within their budget for a savings buffer as part of developing the hardship arrangement. ![]() “This is a really sensible initiative from Westpac and we hope other banks will follow suit,” she said. This will be in the interests of most customers as well as the bank.” “Providing for a savings buffer will mean peace of mind for Westpac customers doing it tough. Financial counsellors know that in reality we should expect “unexpected expenses,” Ms Guthrie said. “When creditors expect every single cent of a person’s uncommitted income to go toward repaying debt, all they are doing is setting people up to fail. “The savings buffer is designed to help customers in severe financial stress keep their heads above water,” she said.įinancial Counselling Australia Chief Executive Fiona Guthrie has welcomed the move from Westpac. “After meeting their monthly expenses, we have found some customers have no income left to prepare for life events like medical emergencies, fixing a household appliance or a car breakdown. “While most customers have resumed mortgage repayments following deferrals at the start of the COVID-19 pandemic, there are around 4,500 accounts where individuals and families require more tailored and flexible support to get back on their feet,” Westpac Director, Customer Vulnerability and Financial Resilience Catherine Fitzpatrick said. Westpac will work with customers to introduce a short-term savings buffer of at least $100 per month when calculating hardship payments, freeing up some money for urgent expenses, paying off higher interest debts or saving for a rainy day. The savings buffer is supported by Financial Counselling Australia (FCA) who have been advocating for banks to help customers in hardship have some money left over to pay for emergency expenses. Two in five said they would feel unprepared financially to cover these emergency expenses. Recent research by Westpac shows one in two Australians have had to pay for unexpected bills in the past 12 months ranging from auto repairs (24%), home repairs (20%), medical bills (20%) and pet emergencies (11%). This change will mean some customers in financial difficulty make smaller repayments to their mortgages allowing them breathing space to save for unexpected expenses. Westpac is today announcing a new policy that will see customers entering hardship arrangements given the option of building a savings buffer. Westpac launches savings buffer to help mortgage customers in financial difficulty
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