Kiwi financial confidence dips, big banks win investors hearts

Big banks are winning the battle for investors' money, says a new survey of financial confidence. Photo / Thinkstock

New Zealanders' financial confidence has 'double dipped', according to a new survey which shows confidence levels in the sector have dropped back to 2009 levels.

But amid the gloom there's been some return of confidence in housing investment, says the RaboDirect Financial Confidence Index (FCI), with housing now deemed to be more attractive as an investment than the financial sector.

One of its other findings was that mainstream banks are doing better in the public eye than other

Banks were rated highly for their financial strength (80 per cent), people having confidence their money will be safe (84 per cent) and in the provision of good products and services (77 per cent).

Overall, financial confidence levels according to the index are at net minus 58 per cent, compared to net minus 44 per cent in February this year. This current sentiment is close to the findings of the index in September last year, when confidence levels were net minus 56 per cent.

Recent GST and personal tax changes have not been well received by the public, with the majority of those surveyed - 58 per cent, saying they expect to be worse off as a result

This includes 48 per cent of people who earn more than $80,000 a year.

The Government is hoping that people will start saving more money as a result of the tax changes, a hope they be borne out by this survey. One third of those surveyed said they intended to save more and spend less.

While 6 per cent said they would start spending more, the rest said there would be no effect.

When it comes to actually saving this new money, the survey shows people are staying conservative.

Mike Heath, general manager of RaboDirect, which sponsored the survey, said the findings showed very little appetite for investing outside of mainstream banks and managed funds - the latter result likely to have been boosted by KiwiSaver.

"People are also split over how they think they will fare financially over the next six months," said Heath. "A quarter of New Zealanders expect things to improve and another quarter expect things to get worse. The remaining 50 per cent expect their finances to stay the same.".

The online survey was run by research company TNS, with a random sample of 1000 New Zealanders.

- HERALD ONLINE