Kiwis more wary about financial wellbeing – ANZ

But they're keeping up their savings habits and continuing to pay down debts

Kiwis more wary about financial wellbeing – ANZ

Kiwis are a little more wary about their financial wellbeing amid current economic uncertainty but are keeping up their savings habits and continuing to pay down their debt where they can.

According to the latest ANZ Financial Wellbeing Indicator (ANZ FWI), people’s overall wellbeing score dropped from 63 out of 100 in the June quarter last year to 59.9 out of 100 in the three months to June 30.

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The ANZ FWI acts as a “pulse check” on how Kiwis feel about their financial situation. It involves three components that make up the total score out of 100:

  • feeling comfortable, which measures the degree to which people are feeling comfortable about their economic situation
  • meeting commitments, which looks at people’s ability to meet financial obligations in regard to bills and payments
  • resilience, which looks at people’s ability to withstand an unexpected setback

The ANZ customer data showed that in the three months to June 30, feeling comfortable held steady at 52.1 following a sharp drop in the previous quarter, meeting commitments fell again to 71.9, while resilience fell to 55.6.

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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 Sharon Zollner, ANZ chief economist. “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 Zollner said “is holding up pretty well” and “a comparative bright note in the recent quarter.”

The ANZ survey also looked into Kiwis’ 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 slightly higher at $4,820.

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

Ben Kelleher, ANZ managing director for personal banking, said one of the best things Kiwis can do, from a financial wellbeing point of view, was to have a savings buffer to help them weather unexpected expenses.

“We know from our research that developing a regular savings habit and having at least $1,000 put aside can materially improve your sense of financial wellbeing,” Kelleher said. “Encouragingly, our customer data shows people are keeping up their savings habits and paying down debt faster where they can. 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.”

The ANZ leader urged any customers who had concerns, or who wanted to talk about their finances, to contact the bank.

“People shouldn’t be nervous about talking to their bank,” Kelleher said. “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. 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.”