Almost half of Kiwis now worry about money daily or weekly - equating to 300,000 more than last year, according to new research.
Rising prices, wages not matching inflation and higher interest rates are continuing to squeeze households’ income in what has already been a tough year for many.
But it’s the younger generation that are feeling most worried about money.
The research, released by the Financial Services Council today, tracked more than 2000 New Zealanders’ views on five key resilience indicators through its Financial Resilience Index (FRI), which included financial confidence, financial literacy, financial preparedness, job security and wellbeing.
Sixty-four per cent of those aged 37 or below said they worry about money daily, weekly or monthly -more so than any other age group.
But this was closely followed by those aged 38 to 52 years old, of which 62.7 per cent said they worry about money at least on a monthly basis.
The report also highlighted the impact financial issues were having on Kiwis’ wellbeing.
More than half (56.3 per cent) of respondents said financial issues adversely affected their mental health, higher than the 49.8 per cent reported last year.
And 59.4 per cent of people reported financial issues having an affect on their overall wellbeing (physical, mental, emotional and social), compared with 52.6 per cent last year.
“The impact of the current cost of living crisis mirrors the increasing wellbeing challenges reported in our latest Financial Resilience Index,” said Financial Services Council chief executive Richard Klipin.
“As we have seen in previous years, it’s the younger generation that are disproportionally bearing the burden of this economic cycle. Whilst older generations are also finding it tough, they have been here before and know that it will come good,” Klipin said.
“For our children and grandchildren, it’s new and simply an unknown.”
Inflation remains a concern for many, with 86.8 per cent saying they were either “very” or “somewhat” unconfident, compared to 79.5 per cent last year, according to the FRI report.
The most significant jump was the 56.1 per cent who said they were “very unconfident” in inflation, compared to 37.3 per cent in 2022.
The research was collected in early March when annual inflation for the year to December was 7.2 per cent. While still high, inflation now appears to have peaked, having recently come in at a lower-than-expected 6.7 per cent for the year to March 2023.
More than a third (35.8 per cent) of respondents said they were “very unconfident” about interest rates.
The Reserve Bank (RBNZ) has been aggressively hiking the Official Cash Rate - now 5.25 per cent - as it fights to bring down 30-year high inflation to a target of between 1-3 per cent.
In response banks’ mortgage rates have risen north of 6.50 per cent.
But figures from the RBNZ show the average rates being paid in February were 4.55 per cent on all mortgage lending and 4.37 per cent on fixed lending.
“Those coming off fixed-rate mortgages over the next 12 months are a group that are going to feel the squeeze and need to prepare for higher monthly payments to reduce money worry and improve overall wellbeing,” Klipin said.
A combined 45.5 per cent of respondents said they were either “very” or “somewhat” unconfident with the overall economy at the moment, up from 43.4 per cent last year.
Worryingly, just 53 per cent of respondents said they could access $5000 within a week in a time of emergency, down from 59 per cent in 2022.
Meanwhile, more respondents reported being “very prepared” for retirement (11 per cent compared with 6.6 per cent in 2022).
However, 62.2 per cent reported being “not prepared at all” or “not particularly prepared” for retirement versus 57.4 per cent last year.
A survey earlier this year from HR company Randstad, titled Workmonitor Employment Research, found two-thirds of New Zealand workers could delay their retirement amid economic uncertainty and rising costs.
Only 34.5 per cent said they are confident of retiring before 65, compared to more than half of workers (50.6 per cent) globally, the report said.
Job security continues to trend upwards, with 30.3 per cent of respondents saying they feel completely secure in their current roles compared with 18.7 per cent when the research was conducted in April 2021, and 23.6 per cent last year. A further 33.8 reported feeling “very secure”.
“The reality is that fewer Kiwis have household investments, are unable to find $5,000 in a week for an emergency and are facing increasing debt that they are unsure if they will be able to pay,” Klipin said.