Despite Kiwis feeling hit by inflation, savers and investors are holding steady - Kiwi Wealth

With inflation creeping up to a 32-year high of 7.3 percent it's no surprise Kiwis' wealth perspectives have taken a hit, with a report finding over one-third of New Zealanders feel less wealthy than they did one year ago. 

But despite the solemn money mood of the nation, Kiwi savers and investors are holding steady.

The new State of Investor Nation report from Kiwi Wealth analyses New Zealanders' perceptions of wealth and approaches to wealth creation. It also measures investment goals, portfolio design, and confidence in financial and property markets.

Out of a survey of 2071 adults, 37 percent felt less wealthy than last year, mainly driven by the elevated cost of living.

It found 47 percent of respondents were highly concerned about the cost of living, with those most likely to express this view being Māori or Pasifika at 55 percent.

Renters and non-investors/savers are notably affected by the cost of living, with the report finding 63 percent of non-investors/savers are more likely to be struggling or only managing to make ends meet in 2022, up from 47 percent a year ago, and 46 percent of renters, up from 41 percent.

Economic confidence has also taken a hit on the back of recent volatility in the housing and financial markets.

The report found Kiwis across the board are significantly less confident in New Zealand's economy with the level of confidence down to 53 percent, from 70 percent one year ago.

Confidence in the country's financial markets, property market and global financial markets also dropped.

While the report shows the bleak reality of how Kiwis are feeling about the pressures on the economy, Kiwi Wealth CEO Rhiannon McKinnon said there is a silver lining. 

"The 2022 report makes sobering reading in terms of how Kiwi are responding to the pressures in the economy that are affecting many at a household level," McKinnon said.

"However, there are bright points - as investors and savers, people are holding steady, which indicates a widespread understanding of investing as a long-term proposition where ups and downs in the economy and global markets are factored in."

The report found there is no change in the proportion of Kiwis who have savings or investments, sitting at 84 percent for the past three years.

Savings accounts are the asset class that has seen the biggest increase in funds allocation over the past year, up to 67 percent from 62 percent in both 2021 and 2022.

The report also found a growing number of New Zealanders continue to move their KiwiSaver accounts to more aggressive funds, reflecting a longer-term view.

There was also an increase in the amount of Kiwis joining KiwiSaver at 69 percent, up from 66 percent in 2021.

The trend towards residential property as an investment is up slightly to 15 percent from 14 percent in 2021.

However the number of Kiwis investing in shares had slightly decreased to 27 percent from 30 percent in 2021, and fewer people are investing in cryptocurrency and exchange-traded funds (ETFs).