Increasing cost of living, drop in income: Kiwis' top concerns

More than 60 per cent of New Zealanders are concerned about a decrease in income over the next six to 12 months - but that's not the biggest worry. Photo / Getty Images

A new survey shows Kiwis are concerned about inflation and the increasing cost of living, coupled with a potential decrease in income, in the year ahead.

Insights from consumer intelligence firm Toluna, which surveyed more than 500 New Zealanders to gauge spending confidence and financial security in September, shows concerns about inflation and the increasing cost of living is the biggest concern among Kiwis, marginally second to fears of an economic recession.

Looking at financial concerns over the next six to 12 months, 85 per cent of Kiwis surveyed said they were concerned about inflation and the increasing cost of living, while 63 per cent said they were concerned about a decrease in income.

About 86 per cent of Kiwis said they were concerned about an economic recession.

Less than half of those surveyed (45 per cent) said they were concerned about being unemployed, while 63 per cent said they were concerned about losing money or capital over the next six to 12 months.

Society becoming "more selfish", the health system being overloaded, further lockdowns and government support not being available were among other concerns.

One in four New Zealanders are not feeling finally secure. Compared to six months ago, 29 per cent of Kiwis said there financial situation was worse, while 58 per cent said it was the same, the survey found.

Stephen Walker, Toluna business director for Australia and New Zealand, said the research showed that New Zealanders were feeling cautious of the outlook over the next six to 12 months, and generally were less positive than their Australian counterparts.

"Kiwis feel less secure about their finances than Aussie and less positive about their financial security. There's a clear difference across the pond," Walker told the Herald.

"I get a sense that maybe the Covid lockdowns, over time, have been dragging on people, and the concept of it perhaps happening again and again; Kiwis are being more cautious."

New Zealand's gross domestic product (GDP) shrank by a record 12.2 per cent in the June quarter as the Covid-19 lockdown and border closures stalled economic output - a level more severe than Australia's record 7 per cent drop during the same period.

In line with consumer sentiment, other data showed that 40 per cent of Kiwis had pulled back on spending in certain areas over the past six months and ramped it up in others.

They were now spending less on big ticket items and holidays, and redirecting that money into homewares and work on their home renovations.

Just over 50 per cent of Kiwis expected to spend less on travel over the next six months, 42 per cent of takeaways, 38 per cent on entertainment and leisure, 28 per cent on electronics, furniture and homewares, 26 per cent of transport and 20 per cent on personal care and beauty items.

Walker said the data suggested Kiwis were planning to pull back on spending and cut down on unnecessary purchases, such as eating out and entertainment, and instead spend more on the home, healthcare and utilities.

This could mean a decrease in spending over Christmas, he said, and Kiwis would likely take longer to think about what they spend and on what over that period.

"Christmas might be a light at the end of the tunnel and may encourage Kiwis to change their spending habits, but right now they are thinking about spending carefully and thinking perhaps about income and their jobs."