New research shows 55% of New Zealanders are struggling with their financial situation – up 17% compared with February 2021.
It came against a backdrop of high inflation, which is 6% and has been at that level or higher for seven quarters.
Out of the people surveyed, 51% say they are ‘starting to sink', or are 'treading water’ and a further 3.5% are ‘sinking badly’.
The research was commissioned by Te Ara Ahunga Ora Retirement Commission and was done by a consultancy, The Research Agency (TRA).
It surveyed 4000 people and is an annual project which started in 2021.
The finding revealed that women, Māori and Pacific Peoples were the worst affected.
Te Ara Ahunga Ora's research head Jo Gamble says the impact of this hardship can be serious.
“Financial stress can ripple across a person’s whole life," she says.
It can affect not only their financial wellbeing but how they relate to the friends and family, and the choices they make socially."
“It’s important for New Zealanders to reach out for help if they are struggling," Gamble says.
The research also looked at New Zealander’s financial behaviour in four key areas: budgeting, saving, tackling debt, and retirement. It found some positive trends, such as people focusing on their money management skills, and considering purchases before they buy them.
But it found more than half the population were feeling squeezed financially.
Average annual expenditure for retiree households put at $55,700
Meanwhile, a second piece of research looks at spending patterns by elderly people, and this presented a slightly more optimistic view.
It was done by economic research institute Motu, but was also funded bv Te Ara Ahunga Ora Retirement Commission.
This piece of research was released simultaneously with the TRA survey but was dated from 2018-2019, and was based on Statistics NZ's Household Economic Survey of that time.
The results found the average annual expenditure for retiree households was $55,700. Of this sum, 13% was allocated to groceries, 19% to housing, and 14% to things like utilities, communications, and insurance. Discretionary expenses accounted for over half, 54%.
Broken down further, retired couples spent an average of $65,100 per annum, but single retirees spent $30,700 annually. That works out at $1252 and $590 per week respectively, far in excess of the maximum NZ Superannuation rates of $632 and $411 respectively.
By cutting out all discretionary spending, retirees could have got by at a pinch, but even modest discretionary spending would have needed a top up. This squares with research by Massey University that says the pension does not meet the costs of most retirees and in some cases does not come close.
The research also confirms that retirees with higher qualifications, who own their homes, enjoy greater incomes, live with their partners, and have no dependent children tend to experience higher subjective well-being levels.
Those with lower subjective well-being are rent-paying retirees, single retirees living with others, and Māori households.
It also shows that as retiree households advance in age, their spending patterns exhibit significant downward shifts, particularly in discretionary expenditure categories such as clothing, transport, and recreation and culture.
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