Financial strain deepens
The Financial Services Council (FSC) reported a significant increase in economic pressure on New Zealanders, with recent data showing that 70% of Kiwis now frequently worry about their finances, the highest level since 2020.
The latest FSC Financial Resilience Index showed that “many New Zealanders are increasingly under pressure, making dealing with the daily stresses and strains of the cost-of-living crisis extremely difficult,” said Richard Klipin (pictured above), CEO of the FSC.
Inflation and interest rates concerns dominate
Amidst ongoing economic challenges, a vast majority of New Zealanders, 89.6%, expressed concern over rising inflation, while 75.6% were troubled by increasing interest rates. These concerns were contributing to a decrease in confidence regarding job security, which has dropped from 89% in 2023 to 85%.
Debt and savings issues
The financial health of many households appeared to be declining, with an increase in personal debt and a decrease in savings.
More individuals reported having personal debt than last year, and a larger number of people now have only a month or less in savings to sustain their lifestyle if they were to lose their jobs.
Additionally, about 60% of renters found it difficult to meet living expenses, and one in five retirees reported only having enough savings to last less than a year.
Homeowners vs. renters
While most homeowners were managing to keep their finances afloat, renters and the younger generation were disproportionately impacted.
“Whilst homeowners are under stress with mortgage rate increases, we are still seeing the younger generations and renters disproportionally bearing the burden of this economic cycle,” Klipin said.
Encouragement and support from FSC
“Despite these challenges, it pays to remember that the markets fluctuate and undergo cycles,” Klipin said. “Whilst things might be challenging right now, eventually the pendulum will swing the other way.”
He urged those facing difficulties to seek support from financial advisers or helplines, emphasising that the sector is ready to assist those in need.
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Facing financial stress in NZ? Share your thoughts and experiences on the FSC’s report about rising economic pressures and how they impact you and your business.
