There are increasing signs of the tougher economic climate starting to hit Kiwis in the pocket, with new research revealing 60 per cent of those surveyed have changed the way they manage their day-to-day expenses in response to it.
The annual research carried out by Kantar on behalf of share trading platform Sharesies found nearly half of those surveyed said that after covering expenses they had only a little money left to spend, save or invest and over a third had reduced their spending on food and groceries.
Leighton Roberts, co-CEO of Sharesies, said it was the first sign he had seen of a change in sentiment from Kiwis.
“We have been talking in the financial sector for some time about how things are going to get tight for people with inflation and with interest rates increasing.
“But this is probably the first survey I have seen where people are actually saying they are feeling it. Over 60 per cent of people are feeling that. That tells me it is starting to flow through a little bit.”
Around two-thirds of those surveyed said they were concerned about the future of New Zealand’s economy, with only around a quarter (26 per cent) hopeful that things would get better in the next year.
Despite the downbeat sentiment and tightening of spending the research found 46 per cent were happy with their current personal financial situation. The research surveyed 1000 people from the general public and 600 Sharesies users. It found 45 per cent of Sharesies users still planned to increase their investment through shares despite the tough year for share markets.
Roberts said they still had 1700 people sign up to use the platform last week.
“We are still getting really strong sign-ups through. People who were investing are still doing the regular amounts. We are getting less of those big one-offs.”
The research found a lack of disposable income was still the highest barrier to investing for a third of those surveyed.
The percentage of people who had bought shares in the last six months was 28 per cent compared to 25 per cent in 2021.
But Roberts said Sharesies users were becoming more risk-averse and moving out of technology stocks into investing more in exchange-traded funds.
He said previously there had been a “buy the dip” mentality coming through from users.
“This time the term being used was more people being prepared to ride out lows. That’s quite a big change as well in people thinking about this.”
Roberts said the change of view was likely a combination of education alongside people feeling like this dip may take a while.
“Realisation this isn’t March 2020 where the sentiment came in so quickly to come in and buy and now it’s not quite like that.” He said it was still promising that people said they were prepared to ride out the lows and that it was still a good time to invest.
The research found Sharesies users were more likely to have switched KiwiSaver providers in the past at 54 per cent, compared to 40 per cent of the general public.
The main reason to change was to get a better return, seek lower fees and to make it easier to track returns.
Sharesies users were also more likely to make larger contributions to KiwiSaver with nearly half saying they contribute more than the minimum 3 per cent.
More than half of Sharesies investors also believed they would need more than a million dollars to fund their retirement compared to 39 per cent of Kiwis in general.
Crypto popularity waning
The number of Kiwis that would consider investing in crypto has fallen from 13 per cent to 7 per cent, with a significant fall in the value of cryptocurrencies in the last year.
Roberts said they had seen that change through their customer care team.
“It can be the most requested thing on the platform for months at a time and then we hear nothing about it. It is not a surprise at the moment. If anything they are thinking about selling out.”
Sharesies doesn’t offer trading in cryptocurrency but investors can use the platform to invest in listed cryptocurrency platforms like Coinbase.
Roberts said there was no hard evidence so far to show people were selling their crypto and investing in shares instead.