About 12,000 more Kiwis went into debt in the final two months of 2025 as Christmas spending ramped up, according to figures from Centrix.
Centrix’s latest credit indicator report shows the number of people behind on their repayments hit 471,000 in the month of December, up from 459,000 in October.
That was greater than the previous two years when consumer arrears rose 9000 in 2024 and 8000 in 2023 in the final two months of the year.
Monika Lacey, Centrix chief operating officer, told the Herald the lead‑up to Christmas is traditionally a period of higher discretionary spending.
“For households already under pressure, that seasonal spending spree could tip finances from ‘just coping’ into arrears.
“While some seasonal deterioration is expected, it is important to reinforce the need for vigilance to stay alert to financial stress during peak spending periods.”
Despite this, consumer arrears levels are 0.8% lower year on year, according to Centrix.
“The fact that year on year consumer arrears have been trending down now for several months is a good sign, and indicates the tide could be starting to turn,” Lacey said.
Demand for consumer credit was up 9.4% year on year, driven by heightened borrowing over the holiday period.
“[This] could be a sign that consumers are feeling more confident about the economy and are more comfortable making those higher cost purchases,” Lacey said.
Wider economic challenges have also contributed to a 41% increase in financial disputes in the first half of the financial year (July to December), according to figures released yesterday by the Financial Services Complaints Limited (FSCL).
The Financial Ombudsman Service saw 235 disputes opened over that time, compared with 167 in the same period a year ago.
“We expect high dispute levels to persist as long as economic conditions remain difficult for many,” Financial Ombudsman Susan Taylor said.
Taylor said KiwiSaver hardship withdrawal rejections were the greatest contributing factor, as people sought help paying their bills.
“People often don’t realise how strict the KiwiSaver rules are, leading to complaints about declined applications.
“We see people with ideas about using their KiwiSaver for longer-term financial relief… but KiwiSaver savings are meant for your retirement.”
Centrix said mortgage arrears edged up slightly to 1.37% of the active population in December, with 21,800 accounts reported as past due.
The number of people behind on their mortgage repayments fell 8% year on year when compared with December 2024 (22,100).
Personal loan arrears rose in December to 9.8%, up 6% year on year.
The hospitality sector experienced the largest rise of annual liquidations in 2025, up 50% compared with the previous year.
This was followed by retail trade (+34%), transport (+27%), property/rental (+17%), construction (+13%) and manufacturing (+12%).
Agriculture bucked the trend, with company liquidations down 11% year on year.
“Despite these increases, early signs of improvement are emerging, with liquidation trends easing in six of the 19 industry sectors,” Lacey said.
“Notable improvements are being seen in agriculture, wholesale trade, and information media and telecommunications services.”
Overall company liquidations rose to 2934 in 2025, the highest annual level since 2010.
Liquidations were up 17.1% in 2025 compared with the previous year when they hit 2505.
Construction remained the leading contributor to company liquidations, with 751 firms liquidated in 2025. However, this represents just 0.9% of all registered construction companies.
The hospitality sector ranked second, recording 376 liquidations for the year.
Cameron Smith is an Auckland-based business reporter. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.