Steve Jurkovich: Kiwibank Chief Executive on the results of the State of Savings index

Data suggests many Kiwis are struggling with their savings. 

Kiwibank’s annual State of Savings index has found that 1 in 3 Kiwis would struggle with paying an unexpected $500 bill. 

39% are saving $100 or less a month as the cost of living sucks up their spare cash. 

CEO Steve Jurkovich told Mike Hosking that historically the reasons people would call up with financial problems are because they lost their job, got divorced, or got an illness. 

He said that people are now six times more likely to say the reason is the cost of living. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Right. Speaking of the economy and numbers, new numbers this
morning around how we're handling the cost of living crisis.
Kiwibanks andual State of Savings Index has found that one
in three of us would struggle with paying an unexpected
five hundred dollars bill. Thirty nine percent of US are
saving less than one hundred dollars a month. The KI
Bank chief executive Steve Yukovic's back. Well, this Steve, very
good morning to you. When you look at the picture

(00:21):
versus I don't know the COVID era of the GFC
any regular time. What's this picture tell us bad?

Speaker 2 (00:25):
Good?

Speaker 1 (00:26):
Or indifferent? Ah?

Speaker 2 (00:27):
Bad lot. People are doing it very tough and particularly
we've seen that more than sax times more likely the
reason that people would bring us up in the state
they've got problems is cost of living. Historically that would
have been the top three reasons would have been lost,
my job, got divorced, or have got an illness. So
it does really show that there's been a big shift
with the weare.

Speaker 1 (00:47):
The strugglers that thirty nine percent saving less than one
hundred dollars a month. Does that reflect your customer profile?
Would it be different at different banks or we don't know.

Speaker 2 (00:55):
No, this is a sample of all of New Zealanders,
though it's absolutely respective of everyone.

Speaker 1 (01:00):
That's depressing, isn't.

Speaker 2 (01:01):
It It is? It shows just how hard it is
for people. I mean the encouraging thing is, you know,
sixty percent of us have a monthly budget, but obviously
budgets so driven by you know, what you've got as
a surplus, so you know. I mean, I think the
short story is being able to put anything away as
soon as you can is absolutely the best idea. The
thing that really struck me might was, you know, a

(01:23):
one off cost and not being able to meet that
without borrowing or selling something. You know that could be
failing a warrant or you know, needing new ties for
your car, which might impact you being able to get
to work. So it does show that people are getting
close to the line and.

Speaker 1 (01:35):
These are working New Zealand does, aren't they? In general?
I mean most that these are people who get an income,
go to work and you would think can tread at
least tread water.

Speaker 2 (01:45):
Yep, very much so, and you know, indicative of a
whole lot of people. I mean the other depressing part
of it and confronting factors that women do. You know, like, hey,
we say to do much worse in the situation as well,
So you know there's some things to steer into there.

Speaker 1 (01:59):
Yeah, exactly. So is it the big bills that like
the mortgage that's killing most people? In other words, we
would save more than one hundred dollars if the mortgage
hadn't gone up.

Speaker 2 (02:06):
Yep, I think so. Also the things that you I mean,
I've heard you talk about this previously, you know, insurance premiums,
those sorts of things. Rates, they're not choices that you
can make to sort of cut back on without big consequences.
And so people are really trying to face into meeting
the bills they can while recognizing they're going to have
to spend lease on entertainment or hospitality, on retail. We've

(02:27):
really seen a cut back there.

Speaker 1 (02:28):
See. Here's the really interesting thing for me. So we're
talking about Adrian or we're talking about cuts, maybe not
until next year. Am z's just there forecast until maybe February.
But even then, if it comes, it's the cuts. If
you're only saving one hundred dollars or less a month,
we're a long way away from getting back to anywhere
near what many people would regard as normalcy.

Speaker 2 (02:46):
Aren't we here? We are? And I think that's what
you have to think about. You know, we certainly we've
done some research in you know, there's lots of articles around.
We're seeing a lot more people fixing their mortgages for
shorter terms, and the hope that the rates are going
to come down really important people work through, you know,
how long the cuts would need to happen for before
you actually net better off. But look, I think a

(03:09):
cut and interest rates will be really good for people's confidence.
I think people were really shocked by, you know, that
sort of out of the box rate call that it
might go up. Those sorts of things really put a
lot of pressure on people. So I think while it
won't be a huge savings I think a cut hopefully
later this year, will be it is that.

Speaker 1 (03:26):
What your banker is saying, still later this year as
opposed to next year?

Speaker 2 (03:29):
Yeah, we are, We're still calling it later in the year,
but I mean everyone's shifted to early twenty five mainly,
So look at you know, if it's late in the year,
it's probably going to be November and probably going to
be twenty five points, all.

Speaker 1 (03:41):
Right, mate, go well, appreciate it. Steve Yukovic, who is
the key Wei Bank chief executive, with us this morning.
For more from the Mic Asking Breakfast, listen live to
news talks it'd be from six am weekdays, or follow
the podcast on iHeartRadio