They can help overcome stormy waters…
New ANZ research has revealed New Zealanders’ view their financial wellbeing with a little more wariness amid current economic uncertainty.
However, the bank’s customer data shows people are keeping up their savings habits and continuing to pay down debt where they can.
The latest ANZ Financial Wellbeing Indicator (ANZ FWI) found people’s overall wellbeing score fell to 59.9 out of 100 in the three months to June 30 2022, compared with 63 out of 100 at the same time last year.
The ANZ FWI is considered a quarterly ‘pulse check’ on how Kiwis feel about their financial situation and involves three components that make up the total score out of 100 - feeling comfortable (with their economic situation), meeting commitments and resilience (ability to withstand an unexpected setback).
ANZ chief economist Sharon Zollner (pictured above left) said in the three months to June 30, feeling comfortable held steady at 52.1 following a sharp drop in the previous quarter, meeting commitments fell again to 71.9, and resilience fell to 55.6.
Read more: First signs emerge that falling inflation is on its way
“The weakening in sentiment in the June quarter was driven by a drop in people’s assessment of their ability to meet their financial commitments,” Zollner said. “Rising costs are forcing people to make some tough choices about their spending and they’re feeling understandably nervous. But a lot of people are in good shape to get through this.”
Zollner said employment rates were high, savings levels were holding and people were choosing to stay on top of their debt and save money where they could.
“This sentiment is reflected in the resilience component of the ANZ FWI score which looks at people’s ability to withstand an unexpected setback,” she said. “This is a comparative bright note in the recent quarter with the resilience score holding up pretty well.”
Read more: How fast will inflation fall?
Zollner said the survey also tracked savings behaviour through the median amount people had saved in their accounts - the long-term average was $4,732, while the current median amount was sitting just above that at $4,820.
“Good financial wellbeing behaviours will help people weather the current stormy waters,” she said.
“We think that’s why many people appear to be wary about the future rather than being pessimistic.”
Zollner said ANZ customer data also showed between November 2021 and August 2022 there was around 47,000 new savings accounts opened by ANZ customers, with a 13.64% lift in customers investing funds into term deposits.
“We found balances owing on ANZ consumer credit cards reduced by 5.3% over the past 12 months,” she said. “Over a third of customers are ahead on their home loans by six months or more which is great to see.”
ANZ managing director for personal banking Ben Kelleher (pictured above right) said from a financial wellbeing point of view, having a savings buffer to help weather unexpected expenses was one of the best things Kiwis could do.
“We know from our research that developing a regular savings habit and having at least $1,000 put aside can materially improve your sense of financial wellbeing,” Kelleher said.
“Encouragingly, our customer data shows people are keeping up their savings habits and paying down debt faster where they can. With the challenges of high inflation, rising interest rates and the higher cost-of-living, we recognise not everyone is able to continue to do this.”
Kelleher said he urged any customers who had concerns, or who wanted to take the opportunity to talk about their finances to contact ANZ.
“People shouldn’t be nervous about talking to their bank. Whether you are looking to get ahead, or get through, we’re here to support customers with the various options available to them,” he said.
“There are steps you can take to manage your home loan and things you can do to help relieve some financial pressure and for those people who can continue to put a little bit extra on their home loan or their credit card balance they will pay less interest and save money over the long term.”
