New findings from Consumer NZ’s Sentiment Tracker show that more than half of New Zealanders (55%) are saving less than 5% of their income. With annual inflation hitting 7.2% and wages failing to keep up, many households are struggling to tuck money away. One in four New Zealanders is unable to put aside anything.
Consumer NZ head of communications and campaigns Gemma Rasmussen said that while there’s no golden figure of how much money you should set aside, many financial experts recommend saving 15% of your income each year. This is based on the estimate that you need 80% of pre-retirement income to enjoy a similar standard of living in retirement.
“With the current cost of living constraints, it is understandable many people are struggling to set aside anything significant,” Ramussen said.
“Our research has found that there’s a rising number of people that have been pushed into hardship in the last year. One in four New Zealanders stated their standard of living had declined.
“Nearly half of households said they are either anxious about how much they have tucked away, or they have no savings at all.
“Consumer research found that a year ago, most people were prioritising saving for their retirement, but the needle has shifted,” she said. “There is very much a focus on having enough money for the here and now. Concerns about paying for housing and food trump anything else.”
The Sentiment Tracker found that one in four New Zealanders find it difficult to meet financial commitments. When it came to assessing spending habits, half of New Zealanders said they had changed their spending habits in the last three months, with the majority opting for less-expensive items than they would normally purchase.
Price competitiveness was the primary consideration when purchasing products, trumping quality, durability, sustainability and supporting local businesses.
Over the past three months, those aged 70+ were least likely to have savings, with 37% reporting they were not setting money aside.