According to a recent report* by the Financial Services Council (FSC), despite these turbulent economic times, New Zealanders’ financial confidence has increased compared to 2020. But there are also concerns to address. For more on this, here’s our summary of key findings.

What’s on Kiwis’ minds?

While job security continues to rise in New Zealand, with 86% of respondents feeling secure in their job, uncertainty remains in other areas. 

This year, the FSC dug deeper into Kiwis’ views of our economy, the impact of Covid-19, and preparedness for an unexpected event. And here’s what they found:

• 43% of respondents were somewhat or very unconfident in the New Zealand economy;
• 65% reported being concerned about house prices, and 65% about interest rates;
• 79% were concerned about inflation;
• 40% said that Covid-19 had negatively affected their finances.

“Inflation worries are not unique to New Zealand and with interest rates increasing to accommodate this, as well as the geopolitical instability caused by events in the Ukraine, means we will have to live in increasing volatile times,” commented Ryan Bessemer, chief executive officer, Trustees Executors.

A lack of financial preparedness 

Compared to March 2020, a bigger proportion of respondents were confident about their finances (86%, up 8%). But, as the FSC pointed out, this increase may not paint the whole picture. 

For example, the survey also found that financial literacy dropped by 5% compared to previous years. And around half of respondents (47%) reported having financial issues that are affecting their personal wellbeing.

What’s more, other responses indicate a lack of protection from the unexpected:

• When asked if they could afford to pay $5,000 for something unexpected within a week, without going into debt, only 59% of respondents said they could. The remainder either didn’t know (7%) or couldn’t afford it. 
• 45% of people surveyed said they would rely on family or friends if they couldn’t work for more than three months, just 45% had an emergency fund, and only 14% have insurance in place to manage financial risks. 

How long could you cope financially without an income? If you’d like to assess your protection gaps, this is a key question to ask yourself. And if you need a more comprehensive assessment of your most likely risks, we’re always here to help.

Why getting quality advice is crucial

The past couple of years highlighted the importance of financial protection from the unexpected – especially now that wages are growing at half the rate of inflation. 

If you’re working on a tighter budget with reduced wiggle room, having a plan is all-the-more crucial. The goal is to have an appropriate combination of insurance and emergency funds to cover your most likely risks. And as the FSC pointed out in their report, arguably, there has never been a more important time for Kiwis to be able to access quality advice.

Like to review your cover or explore new options? Get in touch. As insurance advisers, we’re here to help you secure your financial future.

*Methodology: 2022 data was collected between 25 January and 31 January 2022, with a total of 2,000 valid complete responses being collected in January 2022.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

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