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Financial Services Council data reveal financial resilience slipping

A new financial resilience index to be launched by the FSC next month shows many New Zealanders are in a precarious position.

Tuesday, April 18th 2023, 10:30AM

by Andrea Malcolm

Early data shows 39% of respondents are not able to access money in an emergency (a key indicator for financial resilience and preparedness); up 5% since 2022. This equates to more than 1.5 million Kiwis, not being able to pull together $5,000 within a week without going into debt if they have to pay for something unexpectedly.

The FSC says the figure, which was 34% one year ago, indicates that we’re less prepared for financial shocks than in 2022. The reality is there are trade-offs between balancing shorter-term and longer-term needs, and there are really tough decisions to make to balance them.

FSC chief executive, Richard Klipin, says, “The last year has been incredibly tough for Kiwis with the cost of living going up, the increasing interest rates, and the growing risk of the economy tipping into recession, the focus has clearly gone onto household finances.

“However, as we continue to experience an uncertain economic period, getting recession ready is important for all New Zealanders. Preparing isn’t just about looking after your money – it’s also about looking after you and those you love.”

The FSC is advising the public to:

  • Stress test rainy day funds:

         There’s no better time to start funnelling a bit of each paycheck into a savings account.

  • Prepare for mortgage interest rate rises:

        Those coming up for mortgage rate renewal soon should talk to their mortgage adviser or bank about what they can do to prepare.

  • Don’t neglect KiwiSaver:

        Review KiwiSaver settings and if there are questions talk to the provider or a financial adviser about what options are available.

  • Talk to someone:

       MoneyTalks (0800 345 123) offers a free service for those needing help with day-to-day money matters such as managing debt or budgeting.

  • Things will get better:

       Remember that the markets fluctuate and undergo cycles.

The Financial Services Council’s 2023 Financial Resilience Index research report will be released on Wednesday 3 May 2023.

Tags: FSC

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