Kiwis are already turning to lower-cost retailers to help cope with the rising cost of living. Photo / File
Kiwis are already turning to lower-cost retailers to help cope with the rising cost of living. Photo / File
More Kiwis are worried about the cost of living rising than the impact of Covid-19 on the economy or a financial hit on the markets from the Russian invasion of Ukraine, research has revealed.
Currently the annual consumers price index (CPI) shows inflation is at 5.9 per cent. Groceries, petrol and many household bills have all risen in the past year.
A survey of 1600 customers by Westpac NZ found 83 per cent were worried about rising prices and those under 35 were more concerned (89 per cent) than older age groups.
Inflation ranked ahead of those concerned about the impact from Covid-19 on the economy (57 per cent) and the impact of the Russian invasion of Ukraine on financial markets (52 per cent).
But the good news was that 69 per cent of those questioned said they were also either very confident (22 per cent) or somewhat confident (47 per cent) they could cope with rising prices.
Just 11 per cent said they were either not at all confident or not very confident.
Westpac New Zealand consumer banking and wealth general manager Ian Hankins said it was pleasing more than two-thirds felt confident about coping with the higher cost of living.
"But there will be other people that are more concerned and we just want to raise the discussion about, don't panic, there are options that you can employ to help you manage through these cost of living changes."
He said many were already taking proactive steps to manage rising costs.
Nearly half of those surveyed said they had already cut back on fuel use (44 per cent), eating out/takeaways (43 per cent) and groceries (41 per cent), and 38 per cent said they were considering cutting back on household bills.
Clothing/footwear spending was also in line for a trim (34 per cent) as well as subscription services (30 per cent).
The research found 58 per cent had already cut out unnecessary or wasteful spending, 47 per cent had drawn up a budget, and 44 per cent were shopping at cheaper retailers.
"The most important thing people should do first is understand their ins and outs - so, where is my money going? What is coming in and what is going out?" Hankins said.
"And then with that you can look at the different categories of spend and adjust. Obviously it depends on each person's situation, but there are opportunities to look at different ways of getting to work for example.
"People are looking at where they are shopping for their groceries and things like subscriptions. Understanding your ins and outs is the most critical thing and, pleasingly, nearly 50 per cent of people are doing that and that is something we want to encourage."
More than half (56 per cent) said the cost of living had also caused them to rethink their savings or investment decisions, and a third were planning to increase their weekly savings.
A further 24 per cent said they would decrease their savings, and 11 per cent said they planned to decrease their KiwiSaver contributions.
Westpac New Zealand consumer banking and wealth general manager Ian Hankins. Photo / Supplied
Hankins said the low numbers looking to decrease their KiwiSaver contributions was a positive sign.
"It is balancing the short term and the long term."
He said people still seemed to be prioritising retirement savings as well as medical insurance and medical costs.
"Which is really important. You don't want people to go in and out of insurance as well. It just shows people aren't panicking, they are adjusting. We have got high employment rates, the borders are opening there are some positive things there."
The survey also found many Kiwis are looking to boost their income to manage rising costs.
Of those in fulltime work, 20 per cent had already asked their employer for a pay rise, and a further 32 per cent were considering it.
A total of 56 per cent were either looking for a higher-paying job or might contemplate doing so. When asked what size pay rise they'd need to keep pace with rising prices, the average response was 10 per cent.
Hankins said upskilling was one way for people to get a pay rise rather than asking for more for what they were currently doing.
"If you are upskilling you are increasing the opportunity to work in more skilled areas and typically pay follows that."
He said people could also consider increasing their hours if they worked part-time.
The research also asked people what other impacts the rising cost of living would have.
It found 47 per cent thought it was very likely to impact future generations' ability to succeed in life. The same number expected it to make it harder for people to make positive choices around sustainability and the environment.
A total of 39 per cent thought it was very likely to result in more people leaving New Zealand for opportunities overseas, and 34 per cent believed it would make our standard of living worse compared with other countries.
