Cost-of-living pressures driving more middle and high income earners to seek financial help

Financial practitioners are seeing an average of 40 clients per month as more middle and high-income earning Kiwis seek help. Photo / 123RF

More middle and high-income earning Kiwis are seeking help from financial practitioners amid deepening cost-of-living pressures, new research shows.

DebtManagers and independent research agency TRA released their ‘Towards a fairer financial world’ report today, which highlighted frontline perspectives of financial capability practitioners on what’s driving financial hardship.

The report, which surveyed more than 150 financial mentors and service managers, found financial practitioners were supporting an average of 40 clients per month.

Just under half (46%) reported this being too much work.

Isaac Manase, DebtManagers general manager commercial, said the client landscape was more complex and more diverse.

“Practitioners are seeing debts getting harder to resolve... 64% say debts are more complicated,” he said.

“This isn’t confined to any one group either, with 65% seeing more middle-income clients and 40% seeing more higher-income clients.”

Cost of living (91%) and housing affordability (81%) are the biggest struggles clients face trying to pay off debt, the report said.

“Everyday Kiwis are facing tremendous pressure, matched only by the pressure on the sector itself,” Manase said.

Last month, North Harbour Budgeting financial mentor David Verry told Herald NOW’s Ryan Bridge that queues at budgeting services were getting longer.

“I’ve got clients who have household incomes over $200,000 down to people who are purely living on benefit income,” Verry said.

“We used to like to be back to people within 24 hours of them contacting us. Some budget services now have a two or three week wait to actually get in front of a financial mentor to just start discussing their budget to try and find the solutions.”

Record numbers of Kiwis are turning to KiwiSaver hardship withdrawals to seek relief from cost-of-living pressures.

Inland Revenue figures show KiwiSaver hardship withdrawals for the first quarter of the current financial year are already up 22.5% to $134.6 million, compared to the same period a year ago.

September was also a record month for hardship withdrawals ($48.9m) and the number of people dipping into their retirement funds (5530).

In the last financial year (12 months to June 2025), $470.7m was taken out of KiwiSaver for hardship reasons, up 56.6% from $300.5m over the prior period.

Manase said reaching out early to financial mentors matters, but many people don’t engage because they feel embarrassed or overwhelmed.

“Compounding this is a concerning lack of awareness that free support is available through financial mentors,” he said.

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