Kiwibank Index Shows 41% of New Zealanders Using Debt
Kiwibank reports that approximately 41% of New Zealanders have taken on debt to manage rising living costs, with many using Buy Now, Pay Later schemes for groceries.
The third State of Savings Index from Kiwibank reveals that approximately 40% to 41% of New Zealanders have accrued debt to manage increasing living costs. Grocery prices serve as the primary driver of this financial pressure, impacting 68% of household budgets. The report identifies younger New Zealanders, renters, Māori, and Pacific peoples as the groups most likely to be in debt.
Among those borrowing, 19% have utilized Buy Now, Pay Later (BNPL) schemes, while 12% have borrowed from friends and family. Kiwibank CEO Steve Jurkovich characterized the trend of using BNPL for essentials like supermarkets as worrying. Thom Hartmann, the personal finance lead at Sorted, warned that utilizing these services for essential needs can spiral out of control.
Beyond debt, the index highlights a gap in financial literacy, noting that 46% of New Zealanders miss out on an estimated $500 million in annual interest due to a lack of understanding regarding bonus savings account conditions. Despite these challenges, 44% of New Zealanders report saving regularly and 59% maintain a household budget.
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