Kiwis are wary but keeping up financial wellbeing habits

New Zealanders view their financial wellbeing with a little more wariness amid current economic uncertainty, according to a survey from the country’s biggest bank.

But at the same time ANZ customer data shows people are keeping up their savings habits and continuing to pay down debt where they can.

The latest ANZ Financial Wellbeing Indicator (ANZ FWI) has found people’s overall wellbeing score fell to 59.9 out of 100 in the three months to June 30, compared with 63 out of 100 at the same time last year.

The ANZ FWI is intended as a quarterly ‘pulse check’ on how Kiwis feel about their financial situation. It involves three components that make up the total score out of 100.

These are: feeling comfortable – this component of the score measures the degree to which people are feeling comfortable about their economic situation, meeting commitments and resilience – the ability to withstand an unexpected setback.

In the three months to June 30:

·       Feeling comfortable: this held steady at 52.1 following a sharp drop in the previous quarter.

·       Meeting commitments: this fell again in the June quarter to 71.9.

·       Resilience: this fell to 55.6 in the June quarter.

The weakening in sentiment in the June quarter was driven by a drop in people’s assessment of their ability to meet their financial commitments.

“Rising costs are forcing people to make some tough choices about their spending” said ANZ Chief Economist Sharon Zollner. “And they’re feeling understandably nervous.

“But a lot of people are in good shape to get through this. Employment rates are high, savings levels are holding, people are choosing to stay on top of their debt and save money where they can in case the economy deteriorates.”

This sentiment is reflected in the resilience component of the ANZ FWI score, which looks at people’s ability to withstand an unexpected setback.

"This is a comparative bright note in the recent quarter, with the resilience score holding up pretty well,” Ms Zollner said.

The survey also tracks savings behaviour through the median amount people have saved in their accounts. The long-term average is $4,732, while the current median amount is sitting just above that at $4,820.

“Good financial wellbeing behaviours will help people weather the current stormy waters. We think that’s why many people appear to be wary about the future, rather than being pessimistic,” Ms Zollner said.

ANZ Managing Director for Personal Banking Ben Kelleher said from a financial wellbeing point of view, having a savings buffer to help you weather unexpected expenses is one of the best things you can do.

“We know from our research that developing a regular savings habit and having at least $1000 put aside can materially improve your sense of financial wellbeing.

“Encouragingly our customer data shows people are keeping up their savings habits and paying down debt faster where they can,” Mr Kelleher said.

“With the challenges of high inflation, rising interest rates and the higher cost of living, we recognise not everyone is in a position to continue to do this.”

He urged any customers who had concerns, or who wanted to take the opportunity to talk about their finances, to contact the bank.

“People shouldn’t be nervous about talking to their bank. Whether you are looking to get ahead, or get through, we’re here to support customers with the various options available to them.

“There are steps you can take to manage your home loan and things you can do to help relieve some financial pressure,” Mr Kelleher said.

“And for those people who can continue to put a little bit extra on their home loan or their credit card balance they will pay less interest and save money over the long term.”

ANZ customer data also shows:

·       Between November 2021 and August this year around 47,000 new savings accounts were opened by ANZ customers and there was a 13.64 per cent lift in customers investing funds into Term Deposits.

·       Balances owing on ANZ consumer credit cards reduced by 5.3 per cent over the past 12 months.

·       Over a third of customers are ahead on their home loans by 6 months or more.

The findings in the ANZ Financial Wellbeing Indicator are based on a rolling survey of 7,000 people by Roy Morgan. The full report can be found here.

We have plenty of information to help you manage your finances on our financial wellbeing hub.

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