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More than two-thirds of New Zealanders are confident they can cope with rises in the cost of living and more than half are already taking positive steps to manage their finances, according to new research from Westpac NZ.
A survey of more than 1,600 Westpac customers found 97% of people are worried about the cost of living over the next 12 months. 83% are concerned about the impact of inflation on their own lives, well ahead of the economic impacts of COVID-19 (57%) and the Russian invasion of Ukraine (52%). Younger customers and families with young children are especially worried.
Kiwis were clearly feeling the squeeze, with roughly nine in ten customers saying rising fuel and grocery prices are affecting their households. 44% of people are already spending less on petrol, 43% spending less on eating out and takeaways, and 41% spending less on groceries.
However, Westpac NZ General Manager of Consumer Banking and Wealth Ian Hankins says the survey also found a majority of Kiwi households were already taking proactive steps to make their money go further.
“We’re encouraged to see 58% of people taking action by reducing spending where they can, and 47% recently drawing up a budget. Having a clear handle on your incomings and outgoings is key to helping you manage your money more effectively,” Mr Hankins says.
“We’re committed to working with customers through good times and bad. We hope this research will get customers thinking about their own situation and positive changes they can make.
“If you’re one of the 31% of people worried about your short-term finances, please reach out for help - whether it’s to trusted friends or family, community budget advisers or your bank.”
The survey also identified non-negotiables that customers won’t consider cutting back on, with healthcare and health products (48%) and household bills (44%) top of that list. Of those already spending on public transport, 56% said they wouldn’t consider cutting back.
Respondents were also open to lifestyle changes that could save them money. 29% have already found alternative forms of transport to driving, while another quarter are considering it. Also, more than half have either bought a more fuel-efficient car or are considering it.
“Through COVID-19 many of us have changed our lifestyles to some extent, whether it’s walking and cycling more, or shopping local to support Kiwi business. Those are habits worth keeping up as we deal with cost of living impacts this year,” Mr Hankins says.
“It’s also good to see a third of people say they plan to save more money this year, compared to just a quarter saying they plan to save less. We know from our own data that most home loan customers are better-positioned to deal with cost increases than they were a year ago, but it always pays to think ahead about how your situation could change.”
When prompted to mention anything else they’ve already done to make their money go further, a number of respondents mentioned growing vegetable gardens, buying cheaper in-season fruit and vegetables, working from home, doing more home cooking and entertaining, and installing solar panels to reduce their power bills.
The survey also found many Kiwis are looking to boost their income to manage rising costs. Of those in full time work, 20% have already asked their employer for a pay rise, and a further 32% are considering it. 56% are either looking for a higher-paying job or might contemplate doing so. When asked what size pay rise they’d need to keep pace with rising prices, the average response was 10%.
Mr Hankins acknowledged the rising cost of living is a challenge for many households but can be managed, and encouraged people in financial stress or needing assistance to seek help:
- For a range of money saving tips and tricks, or to sign up for a free Westpac Managing Your Money workshop on issues like budgeting, saving and managing mortgage repayments, visit: https://www.westpac.co.nz/personal/life-money/managing-your-money/
- For independent advice and assistance from financial mentors on all money and debt related matters, people can call FinCap’s Money Talks helpline on 0800 345 123.
- People in need of urgent financial assistance should contact their bank and/or Work and Income NZ.
ENDS
Editor’s note: This survey was conducted on The Westpac Customer Forum from 17 to 23 March. It was completed by 1,618 Westpac Customers, aged 25 years and over, representative of Westpac NZ customers on age, gender and region, with a margin of error of +/- 2.44% at the 95% level of confidence.
Key survey findings
What concerns do you have around your life and money at the moment?
|
|
|
Gender |
Age |
|||
|
|
Total |
Male |
Female |
25 – 34 |
35 – 54 |
55+ |
|
Inflation/rising prices |
83% |
82% |
85% |
89% |
84% |
80% |
|
Impact of COVID-19 on the economy |
57% |
54% |
59% |
49% |
55% |
62% |
|
Impact of the Russian invasion of Ukraine on financial markets |
52% |
51% |
52% |
51% |
47% |
56% |
|
Financial planning for the future |
42% |
37% |
47% |
54% |
48% |
32% |
|
Cost of housing/renting |
38% |
37% |
38% |
63% |
44% |
19% |
|
Cost of changing to more sustainable way of living |
29% |
25% |
33% |
40% |
30% |
23% |
|
Job security |
13% |
11% |
14% |
11% |
20% |
8% |
|
Other |
5% |
5% |
5% |
5% |
5% |
5% |
|
None of the above |
2% |
2% |
2% |
2% |
0% |
3% |
Thinking about the next 12 months, are you concerned about the cost of living in New Zealand?
|
|
|
Gender |
Age |
|||
|
|
Total |
Male |
Female |
25 – 34 |
35 – 54 |
55+ |
|
Extremely concerned |
46% |
39% |
53% |
47% |
48% |
44% |
|
Moderately concerned |
41% |
46% |
37% |
43% |
43% |
40% |
|
Slightly concerned |
10% |
13% |
8% |
9% |
9% |
13% |
|
Not concerned |
2% |
3% |
1% |
1% |
1% |
3% |
|
Unsure |
0% |
0% |
0% |
0% |
0% |
0% |
In the last few months have you been thinking about your finances…
|
|
|
Gender |
Age |
|||
|
|
Total |
Male |
Female |
25 – 34 |
35 – 54 |
55+ |
|
More than usual |
70% |
65% |
74% |
75% |
75% |
62% |
|
Less than usual |
1% |
1% |
1% |
2% |
1% |
0% |
|
About the same |
30% |
34% |
25% |
22% |
24% |
38% |
How confident are you that you can cope with increases in the cost of living over the next 12 months?
|
|
|
Gender |
Age |
|||
|
|
Total |
Male |
Female |
25 – 34 |
35 – 54 |
55+ |
|
Very confident |
22% |
29% |
15% |
19% |
22% |
23% |
|
Somewhat confident |
47% |
48% |
46% |
47% |
48% |
46% |
|
Unsure |
20% |
16% |
24% |
21% |
19% |
21% |
|
Not very confident |
8% |
5% |
11% |
10% |
8% |
8% |
|
Not at all confident |
3% |
2% |
3% |
4% |
3% |
2% |
Which of the following cost increases are having an impact on your household?
|
|
|
Gender |
Age |
|||
|
|
Total |
Male |
Female |
25 – 34 |
35 – 54 |
55+ |
|
Groceries |
93% |
91% |
95% |
92% |
94% |
92% |
|
Petrol |
86% |
85% |
88% |
91% |
86% |
84% |
|
Household bills |
62% |
58% |
66% |
60% |
60% |
65% |
|
Healthcare & health products |
36% |
31% |
42% |
34% |
30% |
42% |
|
Eating out/takeaways |
23% |
22% |
24% |
31% |
26% |
16% |
|
Clothing/footwear |
19% |
14% |
23% |
15% |
23% |
18% |
|
Subscriptions (TV/music/magazines) |
11% |
10% |
12% |
17% |
10% |
10% |
|
Public transport |
4% |
4% |
4% |
7% |
4% |
3% |
|
Other |
4% |
4% |
5% |
3% |
5% |
5% |
|
None of the above |
3% |
4% |
2% |
1% |
3% |
4% |
Which of the following are you cutting back on, or considering cutting back on?
|
|
Already cutting back |
Considering cutting back |
Wouldn’t consider cutting back |
Don’t currently spend on this |
|
Groceries |
41% |
34% |
25% |
0% |
|
Petrol |
44% |
30% |
20% |
5% |
|
Household bills |
16% |
38% |
44% |
2% |
|
Healthcare & health products |
17% |
25% |
48% |
10% |
|
Eating out/takeaways |
43% |
31% |
10% |
15% |
|
Clothing/footwear |
34% |
34% |
21% |
11% |
|
Subscriptions (TV/music/magazines) |
12% |
30% |
24% |
34% |
|
Public transport |
5% |
3% |
9% |
84% |
Which of the following have you done or are considering doing in the next few months?
|
|
Have done recently |
Considering/ may consider |
Wouldn’t consider |
Not sure |
|
Draw up a budget |
47% |
30% |
16% |
7% |
|
Cut out unnecessary or wasteful spending |
58% |
36% |
4% |
2% |
|
Get more fuel efficient car |
15% |
38% |
35% |
12% |
|
Walk, bike, use public transport instead of driving |
29% |
25% |
39% |
7% |
|
Shop at cheaper retailers |
44% |
39% |
12% |
5% |
|
Talk to friends/family/trusted advisers about your finances |
21% |
27% |
38% |
14% |
|
Ask your employer for a payrise |
13% |
23% |
48% |
16% |
|
Look for a higher paying job |
15% |
26% |
46% |
13% |
|
Look for other ways to supplement your income |
18% |
38% |
32% |
12% |
|
Move to a location where cost of living is cheaper |
5% |
17% |
69% |
8% |
Has the cost of living caused you to rethink any of your savings or investment decisions over the next 12 months?
|
|
|
Gender |
Age |
|||
|
|
Total |
Male |
Female |
25 – 34 |
35 – 54 |
55+ |
|
Yes |
56% |
55% |
57% |
66% |
58% |
49% |
|
No |
33% |
37% |
29% |
25% |
33% |
38% |
|
Not sure |
11% |
7% |
14% |
9% |
9% |
13% |
If yes to the above, what changes are you thinking of making?
|
|
Planning to increase |
Planning to decrease |
N/A or don’t currently have |
No plans to change |
|
Weekly savings |
33% |
24% |
10% |
32% |
|
Term deposits |
8% |
7% |
61% |
24% |
|
KiwiSaver contributions |
8% |
11% |
21% |
61% |
|
Managed fund contributions |
9% |
7% |
57% |
28% |
|
Investment properties |
5% |
4% |
71% |
20% |
|
Cryptocurrency investments |
4% |
3% |
83% |
10% |
|
Other savings/investments |
10% |
5% |
71% |
14% |
Do you think it’s likely the current cost of living in New Zealand will…
|
|
Very unlikely |
Unlikely |
Neutral |
Likely |
Very likely |
Don’t know |
|
Impact future generations’ ability to succeed in life |
2% |
5% |
8% |
35% |
47% |
3% |
|
Make our standard of living worse compared with other countries |
2% |
8% |
16% |
37% |
34% |
3% |
|
Result in more people leaving New Zealand for opportunities overseas |
2% |
3% |
10% |
33% |
39% |
3% |
|
Make it harder to make positive choices around sustainability and the environment |
2% |
3% |
9% |
36% |
47% |
3% |