Rising interest rates and inflation fuel anxiety
A majority of New Zealanders are worried about their finances, according to a report by the Financial Services Council (FSC).
In the council’s latest Financial Resilience Index tracker, about 70% of New Zealanders said they worried about money daily, weekly, or monthly. The metric was the highest seen since the onset of the pandemic in 2020, with 89.6% saying they were concerned about inflation while 75.6% worried about the interest rates.
“This latest research shows many New Zealanders are increasingly under pressure, making dealing with the daily stresses and strains of the cost-of-living crisis extremely difficult,” said FSC CEO Richard Klipin.
The report also found that job security confidence fell to 85% from the 89% seen in 2023. There was also a 6% increase in the number of respondents that said they have personal debt they need to settle. Many of them also admitted that if they lose their job, they can only sustain their current lifestyle for a month or less.
About 60% of respondents who were renting said that they faced great difficulty in managing their living expenses.
“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,” said Klipin.
A fifth of respondents who were already retired also admitted that their savings could only maintain their current lifestyle for less than a year.
Despite this current state of affairs among New Zealanders and their anxieties over their finances, the FSC’s chief executive remained optimistic.
“Despite these challenges, it pays to remember that the markets fluctuate and undergo cycles. Whilst things might be challenging right now, eventually the pendulum will swing the other way,” said Klipin.
He suggested that people should consult a financial adviser if they were facing any adversary when it comes to managing their finances amidst the shaky state of the economy.
