Nearly 40 percent of Kiwis don't have $5000 saved for emergencies, survey finds

A new survey shows nearly 40 percent of New Zealanders don't have $5000 saved in case of an emergency.

The survey of 2030 people by the Financial Services Council looked at people's financial resilience.

It found more than 1.5 million Kiwis could not access $5000 within a week without going into debt if they had to pay for something unexpectedly - up 5 percent since 2022.

The current figure of 39 percent compares with 34 percent in 2022 - showing New Zealanders are less prepared for financial shock than they were a year ago.

FSC Chief Executive Richard Klipin said the data shows the "precarious position" many New Zealanders are in.

Klipkin said this coupled with the recent Reserve Bank of New Zealand decision to hike the Official Cash Rate to 5.25 percent means many households are facing extremely challenging times.

"The last year has been incredibly tough for Kiwis with the cost of living going up, the increasing interest rates, and the growing risk of the economy tipping into recession, the focus has clearly gone onto household finances," he said.

"However, as we continue to experience an uncertain economic period, getting recession ready is important for all New Zealanders. Preparing isn't just about looking after your money - it's also about looking after you and those you love."

Klipkin urged people to take the time to become "recession ready" by leaning into "that famous Kiwi resilience".

"If you are concerned about your finances, the first and most important thing to do is to take stock, and if you have any questions speak with your whānau, friends, bank, insurer, KiwiSaver or investment provider, and if you have one, your financial adviser," he said.

It's not the first survey to raise concerns about New Zealanders' financial resilience. In fact, a recent report found a huge chunk of people aren't saving a cent.

Canstar released its latest Consumer Pulse Report in March which tracks the financial sentiments of Kiwis. It found New Zealand household saving levels were higher in 2022 than pre-COVID levels with nearly one-third of Kiwis managing to save around 10 percent of their income, while 15 percent managed to save one-fifth.

Over a third (36 percent) of Kiwis said they're saving the same or more than usual.

Another third (34 percent) said they have dipped into their savings, while nearly one in five (18 percent) have taken on debt.

The report found households are putting away nearly $500 a month on average, while Aucklanders are saving a bit more at $523 a month.

It found men save more than women, $560 and $447, respectively, and high-earning households (($120,000+) save nearly $750 a month.

However, one-quarter of New Zealanders aren't saving a cent.

The cost of groceries and mortgages is what's worrying Kiwis the most financially, with 28 percent of respondents saying they aren't living within their means.

According to the report, the top reason Kiwis aren't saving is because they live payday to payday (43 percent), followed by saving not being a financial goal (18 percent). While 11 percent of non-savers said they have saved enough already.

The number of people who are free of personal debt remains steady at around 44 percent, the report said. Of those in debt, the majority (59 percent) said they never miss repayments while just under one in five said they miss repayments only rarely.

Unfortunately, seven percent of respondents always miss repayments, however, that figure is down from 19 percent the previous year.

The report also found more men miss repayments (15 percent) than women (four percent).

Despite these figures, 80 percent believe their debt is manageable.

Top Tips to get Recession Ready:

  • Stress test your rainy day fundIt's times like these when rainy day funds come into their own. If you haven't had to dig into it yet, there's no better time to start funnelling a bit of each paycheck into a savings account.

  • Prepare for mortgage interest rate rises: If you've been on a fixed rate mortgage that's coming up for renewal soon, talk to your mortgage adviser or bank about what you can do to prepare.

  • Don't neglect your KiwiSaver: Preparing longer term is as important as making sure you are recession ready in the shorter term - review your KiwiSaver settings and if you have any questions, talk to your provider or your financial adviser about your options.

  • Talk to someone: MoneyTalks (0800 345 123) offers a free service for those needing help with day-to-day money matters such as managing debt or budgeting.
  • Things will get better: Remember that the markets fluctuate and undergo cycles. If you are doing it tough, remember that while things might be challenging right now, eventually the pendulum will swing the other way.