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One in three Kiwis were feeling less wealthy in June compared to three months earlier, research by KiwiSaver provider Kiwi Wealth has revealed.
The state-owned investment company which is a sister company to Kiwibank carried out its an annual State of the Investor Nation report in February but decided to do subsequent research in June to show the impact of Covid-19.
It found the pandemic has had a significant impact on the wealth perceptions of New Zealanders - particularly among those on the more well-heeled end of town.
Melissa Vasta, general manager retail and product at Kiwi Wealth, said the decline in perceptions of wealth and confidence was mostly among wealthier people, homeowners and investors.
"Covid-19 has hit perceptions of wealth and confidence across the board but the main impact has been with high-income earners, investors and homeowners, who feel significantly less wealthy now compared to three months ago."
Of those with a household income of over $130k, 31 per cent were feeling less wealthy in June compared to 13 per cent in February.
Vasta said the market turmoil and gloomy outlook for employment and investments including property had hurt them more because they have more.
"Employees, with one source of income - young people and renters especially, don't feel noticeably less wealthy or confident than they did in February."
She said confidence was likely to have held up for this group if they had held onto their job, and may have a little more money in the pocket because of reduced spending during lockdown.
One in three Kiwis feel like their wealth has been cut during the Covid-19 pandemic. Photo / file
But Vasta warned that young people, renters, Māori and Pasifika were also more likely to take a financial hit as business closures and redundancies bite as they were much more reliant on employment income for their wealth.
"The likelihood is that they will be disproportionately affected as a recession begins to bite and wealth prospects remain bleak for many younger renters."
She said they were faced with much higher costs of living and greater levels of debt than previous generations and as a result had less capacity to save or invest to create future wealth.
"The data also shows they're much more likely to be unhappy, stressed and have poorer levels of overall wellbeing."
More savings
There was some silver lining to the lockdown with more Kiwis saying they had investments or savings in June compared to February - a rise of 4 percentage points to 84 per cent.
Vasta said this was particularly true for middle-income earners and homeowners.
"Most likely that's because people were spending less during lockdown so have more discretionary money to put towards savings or investments."
Of those with investments a quarter made changes between March and June, something that was typically expected over a full year.
Lower happiness
The percentage of those who said they were happy also fell between February and June from 69 per cent to 64 per cent although those feeling stressed reduced from 38 per cent to 35 per cent.
The report noted this was likely because people felt there was no longer an imminent health threat facing the country due to the pandemic.
The research also found Covid-19 has impacted many people's confidence in meeting their retirement goals.
The percentage feeling confident dropped from 41 per cent to 36 per cent with middle-aged New Zealanders (35 to 54 years old), homeowners and higher-income earners ($130k income plus) seeing the biggest hit to their confidence.
