Cost of living crisis: What help is available for middle-income earners as inflation, rising interest rates bite

High inflation, rising interest rates and winter are all putting pressure on Kiwis' wallets and middle-income earners are feeling the pinch as well. 

A perfect storm of economic factors is driving the costs of essentials sky-high with grocery, petrol and mortgage prices all spiking.

The Government has taken several steps to help struggling Kiwis including slashing excise tax on fuel and introducing free public transport for three months. And in the 2022 Budget, the Government also introduced a one-off $350 payment for Kiwis earning less than $70,000 a year. 

While the payment has been welcomed there are concerns from experts the recent Official Cash Rate rise has already wiped out the payment. 

Last week Newshub ran an article about the help available for lower-income Kiwis, but those on higher incomes are feeling the pinch as well. 

For middle-income Kiwis, there is good and bad news. The bad news is there's no easily available help in the form of a cash injection, but the good news is that there might be more support available than you think. 

Here are some tips and tricks to manage the increasing cost of living even if you're making good money. 


You may also be able to withdraw a portion of your KiwiSaver early if you're experiencing financial hardship. 

To withdraw funds you will need to provide evidence you are suffering significant financial hardship.

Significant financial hardship includes when you:

  • cannot meet minimum living expenses
  • cannot pay the mortgage on the home you live in, and your mortgage provider is seeking to enforce the mortgage
  • need to modify your home to meet your special needs or those of a dependent family member
  • need to pay for medical treatment for yourself or a dependent family member
  • have a serious illness
  • need to pay funeral costs of a dependent family member.

If you don't want to withdraw funds but can't keep contributing you can apply for a savings suspension. 

You can apply for a savings suspension within the first 12 months if you’re experiencing, or likely to experience, financial hardship.

After your first 12 months of membership you can apply for a savings suspension regardless of your financial situation.

More details can be found here

Mortgage holidays 

Another option for Kiwi homeowners who are struggling to pay their bills as interest rates rise is a mortgage holiday. Each bank has different rules but most will allow homeowners to take at least a three-month break. It's worth noting interest will still accrue during the holiday. Contact your bank for details on how to apply for a mortgage holiday. 

Financial strategist and founder of enableMe Hannah McQueen told Newshub working with an expert to figure out the best way to structure your mortgage can also save Kiwis hundreds of thousands of dollars over a 10-year period.  

The cost of living in New Zealand is skyrocketing.
The cost of living in New Zealand is skyrocketing. Photo credit: Getty Images

Working for Families 

While many middle-income families won't be eligible for much Government support they might be able to access Working for Families if they have children. 

Parents with children under the age of 18 might be eligible for regular payments if they meet certain criteria. The amount you can get depends on your income. For example a family earning $95,001 to $96,500 a year who have three children could get up to $56 a week if they meet all the necessary criteria. More details can be found here.


Several charities also offer assistance through food parcels. Details for your closest food bank can be found through Foodbank New Zealand.  

But even if you can't access a quick cash injection there are still other options available. 

Hannah McQueen said many Kiwis can free up significant amounts of money by looking at how they’re managing their finance. 

Here are her tips and tricks. 

Have a plan 

Hannah McQueen said the biggest blunder most Kiwis make is not having any sort of financial plan. 

"Most people are time poor and bombastic with their financial strategy, there just genuinely isn't one," McQueen said. 

"The impact of that is that they don't achieve and when there is inflation they just go backwards and then they revert to funding [their spending] through loans and that is the very worst thing that they could do."

She said taking the time to come up with a savings strategy that excites you makes all the difference. 

McQueen said when coming up with a plan it's important to cover all your basics and identify your "non-negotiable" costs. 

"If we think about all your spending, a chunk of it is bills so that's not linked to making you feel happy at all, it just is what it is," she said.

"A chunk of it is probably food and socialising and most people would spend a little bit more than they think on those things. 

"Then you will have your mortgage or your rent which is another chunk and then you will have your non-negotiable costs which are things that are important to you and you don't want to compromise on." 

She said when it comes to saving money from the non-negotiables it's about focusing on two or three things that are must-haves. 

"So it's about saying, 'let's get those in the plan' and then let's determine how sensitive that spending is, so could we get a little bit smart with it.

"For example, could you instead of allowing for a coffee a day could you go to a coffee club that will give you a free coffee every week. And although it is a non-negotiable there's probably a little bit of spending with that we could squeeze out if we felt like it. "

Look at your spending 

The next thing to do is figure out where you're spending money and how much is purposeful versus subconscious fritter, McQueen said. 

"The first thing when you're getting headwinds is to get everything as efficient as possible, so that comes down to, have you maximised your income opportunity? And then what about your expenses?

"Most people fritter 15 percent of their income so they spend money on things that don't make them any happier or get them ahead faster. They're either spending because it's unconscious or they haven't had a plan with a clear reason why they shouldn't. 

"If we can find that fritter, then that normally is enough to stop people going backwards and actually get ahead even with the headwinds," she said. 

Manage emotions 

Unfortunately, it's not as simple as just having a plan, McQueen said. The way people spend money is very emotional and simply being financially literate often isn't enough.

"Although we like to think it is addition and subtraction it is more than money in versus out. How we behave around money makes it quite difficult for us to stop spending without clear rationale behind that and a system to improve that," she said. 

"The studies are conclusive that you can tell someone how to improve when it comes to finances and they will understand what you have told them, but less than three percent of people will actually apply what they've learnt. Financial literacy isn't the solution for these people, they actually need help in changing their behaviours. "

Get a second opinion 

McQueen said if Kiwis have tried the do-it-yourself approach and it isn't working, enlist the help of a financial advisor before looking at loans. 

"Get a second opinion before you put your hands up in the air and say it's hopeless because often it's not and you need a different perspective with a different lens." 

Support for low-income earners and families (including people who aren't working) can be found here.