Kiwis financially better off despite Covid-19 lockdown disruption — ASB study

Source: 1News

Despite pressures of Covid-19 and multiple nationwide lockdowns, Kiwis are better off financially than they were a year ago, according to a financial wellbeing study by ASB.

New Zealand money.

Today marks a year since the country went into Alert Level 4 lockdown due to Covid-19 spreading around the country, during which only essential businesses were allowed to continue operating.

In an attempt to temper the impacts of lockdown, the Government offered a wage subsidy to affected businesses, froze rent increases and the Reserve Bank kept the interest rate at a record low and pumped money into the economy with quantitative easing.

But on average, Kiwis are eight per cent better off financially than before lockdown, according to the ASB research, largely driven by reduced spending.

"The past 12 months have been very challenging for New Zealanders and it is good to see that collectively our financial wellbeing has held up surprisingly well," ASB chief executive Vittoria Shortt says.

However, Kiwis overall are still doing it tough.

Nearly half of ASB customers have less than $1000 in savings, the bank says, and more than a third are living paycheck-to-paycheck.

Around 15 per cent always spend more than 80 per cent of their income.

Shortt says the statistics "ring alarm bells".

"This puts them in a potentially vulnerable position," she says.

"We know we are not out of the woods yet. There are more Covid-19 effects to roll through the economy and this research highlights some concerns."

The research was a collaboration between ASB and the University of Melbourne's Institute of Applied Economic and Social Research, carried out monthly since October 2019.