Haydee Stroud, Acting Chief Executive Officer of the FSC, stated, “the reality is stark: 94% of New Zealanders are concerned about their finances, and many are being forced to adjust their spending habits out of necessity.
“While some New Zealanders can cut back on non-essential purchases like takeaways and treats, others are confronting difficult decisions, such as whether to heat their homes (24%) or afford essential medications (16%).”
The research report, Consumer Resilience and the Road to Prosperity, examines financial trends across New Zealand in the short, medium, and long-term. It shows that despite their resilience, many New Zealanders are feeling the strain and using available savings.
“One key finding is that the amount of income that can be accessed within a week has decreased across all age groups compared to previous years.
“For retirees, one in five reports having less than a year’s worth of retirement savings to maintain their current lifestyle,” Ms. Stroud added.
“KiwiSaver remains the most popular investment in New Zealand, with 79% of New Zealanders participating and saving for their retirement.
“However, individual investment levels are falling short of what’s needed for a comfortable retirement.
“Our research consistently shows that New Zealanders aren’t prepared for retirement, which is why we continue to call for a review of KiwiSaver settings. A review would future-proof the scheme and help New Zealanders in the long-term, no matter the economic climate,” Ms. Stroud said.
As interest rates begin to ease, the report emphasises the importance of rebuilding emergency funds and retirement savings.
Lloyd Kavanagh, Partner at MinterEllisonRuddWatts, which partnered with the FSC on the research, commented, “it’s undeniably tough out there, and people are prioritising immediate needs over future security.
“This is exacerbated in tough economic times like these as finances are stretched and saving for retirement can often take a back seat when it continues to be important to build a nest egg if you can.
“That’s why we’re supporting the FSC’s call for a comprehensive review of KiwiSaver to ensure the scheme is fit for the future,” Mr. Kavanagh added.
Ms. Stroud concluded, “finances can be complex. Help, support and advice are crucial.
“Whether your concerns are about the short-term cost-of-living or long-term investment and retirement planning, we encourage you to talk with your whānau, providers, or a registered financial adviser. It will help boost your financial confidence and wellbeing.”
Access the report here.
ENDS