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41 percent of Kiwis taking on debt to cover increased living costs – Kiwibank
The cost of living – and rising grocery bills in particular – is proving a big barrier to New Zealanders saving, according to a new report from Kiwibank.
The Kiwibank State of Savings Index, now in its third year, does a deep dive into New Zealanders’ saving habits.
The nationwide survey was carried out by Talbot Mills Research.
It shows that while saving remains challenging, New Zealanders’ budgeting and saving habits are holding steady.
This year’s report found 44 percent of Kiwis regularly saved, compared with 43 percent last year.
Kiwibank chief executive Steve Jurkovich said the research showed that despite ongoing financial pressure, Kiwis continued to budget, save and find ways to make progress, from cutting spending to using new savings tools.
However, of those not saving, 61 percent said they could not save because they were prioritising surviving and could not make ends meet, while of those who reported saving challenges, 74 percent cited the cost of living as their biggest savings barrier.
Forty-one percent said they had taken on debt to cover increased living costs, with 19 percent turning to Buy Now, Pay Later schemes and 12 percent getting loans from family and friends.
“We are seeing a definite trend of people finding that they are having to turn to and use Buy Now, Pay Later in situations like supermarkets and other places where we probably didn’t historically think that Buy Now, Pay Later would be showing up,” Jurkovich said.
When it comes to financial emergencies, 28 percent of Kiwis said they would not have enough in their accounts to cover an unexpected bill of $500 without borrowing it, selling something, or putting it on a credit card.
The report found some groups faced greater pressures around savings than others.
For example, younger New Zealanders and renters were far more likely to have taken on debt to cover the cost of living, while Māori and Pacific peoples were significantly more likely to have taken on debt than NZ Europeans.
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Budgeting
The State of Savings report found 59 percent of Kiwis reported having a household budget, with 85 percent saying they broadly stick to it, up 1 percent from last year.
Thirty-nine percent made deliberate changes to improve savings, such as reducing discretionary spending, changing grocery shopping habits and cancelling subscriptions.
Steve Jurkovich said it showed the importance of building saving habits if people were able.
“It does really show, if you can just get started on that habit, that the habit sticks, and I 100 percent understand there are a bunch of people who wish they were in that position.”
It also found that Kiwis were starting to turn to new tools to help with their budgeting and saving.
Twelve percent of those surveyed said they used AI for budgeting and savings advice, with 64 percent saying they thought it was helpful.
When it comes to savings products, only 54 percent said they were aware that savings accounts often require specific conditions to be met for customers to earn the headline interest rate.
The emergence of open banking was also starting to play a role in saving habits.
Open banking allows people to share their bank data with standalone financial apps and technology that can then make payments on their behalf.
Fifty-two percent of Kiwis said they had some understanding of open banking.
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The chief executive of the Parliamentary Service is confident there will be enough room to accommodate the increased number of MPs and their staff coming into Parliament.
On current numbers, up to 131 MPs could be sitting in the Chamber following the election, brought on by a record overhang result.
Clerk of the House of Representatives Dr David Wilson told the Spinoff that currently the debating chamber had enough chairs to seat 124 MPs – including the Speaker of the House – and work was being done to accommodate more by altering the seating arrangement.
In a statement, Parliamentary Service chief executive Rafael Gonzalez-Montero said planning for a larger Parliament had been going for “some time”.
“Now that the election results have confirmed an increase to the number of members we are looking at several options.
“We are confident we will be able to accommodate all members within the Chamber.”
VNP / Phil Smith
Gonzalez-Montero said office accommodation for members and their staff would be “stretched” for a short time, but the new Members’ Building was only a few months away from “practical completion”.
That building – located behind Parliament – was due to be ready to occupy in April next year and had capacity to accommodate around 30 backbench MPs.
“All members should be in fit-for-purpose accommodation from that point,” Gonzalez-Montero said.
Following the 2023 election, 123 MPs sat in the Chamber – a record number at the time. That decreased to 122 following the resignation of National MP Judith Collins.
Collins held the seat of Papakura and stepped down in May and Parliament voted against holding a by-election because it was too close to the election.
The election result also meant high-ranking National Party MPs like Chris Bishop, Paul Goldsmith, Nicola Willis and Gerry Brownlee – Speaker of the House and an MP for 30 years – would likely not make it back into Parliament.
Only resigning or retiring MPs were permitted to give a valedictory speech meaning none of them would get the chance to give a valedictory statement.
Asked if their would be special allowances for valedictories, Wilson said in a statement that normally only MPs were allowed to speak in the House but the House could suspend its own rules or temporarily alter them.
“It could do so to allow former members to address the House.”
Wilson said no such arrangements could be made until the next Parliament opened and members sworn in.
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