In a report by the the Commission for Financial Capability (CFFC) published this week, it was revealed that a survey on the impact of COVID-19 on New Zealanders’ financial wellbeing undertaken during Level 4 showed 34 percent of households were in difficulty and 40 percent were at risk of tipping into hardship.
Thank you for reading this post, don't forget to subscribe!The survey of 3000 New Zealanders across the last two weeks in April was conducted by CFFC as part of an international study in eight countries. So far two other countries’ results are in, from the UK and Norway, showing New Zealanders’ were worst affected of the three.
In the UK, 28% of respondents were in difficulty and 37% at risk; in Norway only 8% of people were in difficulty and 30% were at risk.
Other key findings of the New Zealand study were:
• 10% of households had already missed a rent or mortgage payment, and housing stress was highest in Auckland
• Māori, Pacific Peoples and young people were worst affected
• Workers in insecure forms of work before the crisis were among the worst affected, and they were disproportionately young and non-European
• Low confidence was leading to decisions informed by panic, such as taking out extra loans or trying to access KiwiSaver funds through hardship withdrawals
• High numbers had switched their KiwiSaver fund to one that was more conservative, thus locking in their losses
• Free financial guidance, and the option to negotiate with creditors, were under-utilised
• The results account for the 40% of all households surveyed in which at least one member was receiving the wage subsidy
Reasons for New Zealanders’ low financial resilience compared to survey respondents in other countries included country’s low levels of household savings before the crisis (New Zealanders have the worst savings rate in the OECD).
Other issues include low social welfare benefits, a large number of people with jobs in tourism and international education, and a high number of people in insecure employment, including those in casual work, the self-employed, or on temporary contracts. – information courtesy CFFC
