The number of New Zealanders reporting financial hardship has increased 19% over the past year according to the latest report by Centrix.
In its latest Credit Indicator, the credit reporting agency says 14,300 accounts are reported as being in financial hardship, with more than half of those due to mortgage repayment problems, and 30% relating to credit card debt.
While mortgage rates eased in 2024, in line with OCR reductions by the Reserve Bank, it wasn’t enough to cushion the blow from a particularly tough year for New Zealand’s economy.
With the country experiencing a recession and relatively high unemployment, HSBC’s Paul Bloxham even claimed our economy took the biggest hit in the world last year.
Overall, life continues to be difficult for many households. Latest data from Stats NZ shows Kiwis faced a 3% increase in their cost of living last year, driven largely by high mortgage rates.
Continued drops to the OCR, and corresponding falls in mortgage rates, may help ease the pressure, but for now many people are stretched financially.
The number of people behind on their personal loan payments has also increased, rising 9.2% in December, up from 8.1% in November.
Loansmart Managing Director Murray Greig says life continues to be very difficult for many Kiwi households.
“As we can see from this data, 2024 has been pretty dismal for the economy and a lot of people are under a huge amount of financial stress. Keeping up with mortgage and loan repayments puts a lot of pressure on when you’re also just trying to make ends meet.
“But this is why it’s so important to get on top of your finances so your situation doesn’t spiral out of control.”
Murray says for people whose loan repayments are too high, there are things they can do to reduce them.
“If you’re struggling to meet your monthly loan repayments, a debt consolidation loan from Loansmart can help reduce this cost. We simply take your existing loans, pay them off and combine the debt into a new loan.
“By structuring the loan the right way, we can significantly reduce your loan repayments and give you more breathing room.”
Loansmart offers a free loan assessment. This is when one of their team’s financial advisors takes a detailed look at your financial situation, including all your loan repayments. This involves breaking down where your money is going—covering personal loans, car payments, credit cards, and Buy Now Pay Later services.
Once they’ve analysed your finances, the team offers tailored advice to help lower debt and make repayments more manageable. The service has been in high demand recently and has resulted in many individuals and couples making considerable savings off loan repayments.
