May 28, 2025 • 8 mins
New research published by the FMA's economics team this week shows that while many New Zealanders feel confident in their financial decisions, there are significant gaps between their financial goals and actual holdings of investment products.
Good Cents: Kiwis on Savings and Debt looks into New Zealanders' attitudes and behaviours towards savings, debt reduction, and financial guidance.
FMA Head of Economics and Research Gael Price speaks about the research, which found there is room for financial providers to help New Zealanders better align investment choices with financial goals, help them better understand debt management, and increase their comfort with seeking financial information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_01 (00:00):
Kia ora, and welcome to the FMA's Occasional
Conversation Series podcast,where we talk about the latest
research that we've been workingon.
I'm joined today by Gail Price,Head of Economics and Research
at the FMA, whose team is behindthe latest piece of research
called Good Sense Kiwis onSavings and Debt.
Welcome, Gail.
(00:21):
Hi, Heidi.
Can you tell us about thisresearch and what you've found?
SPEAKER_00 (00:25):
Absolutely.
We wanted to know what NewZealand consumers think about
savings and debts.
We were interested in theirattitudes to savings and also
what types of savings and debtproducts they use.
We also asked about what typesof financial institutions they
work with around their savingsand their debts.
SPEAKER_01 (00:41):
And what did you find?
We
SPEAKER_00 (00:43):
found that most people are pretty comfortable
with their experience aroundsavings and debt.
They feel like they're wellinformed and they know how to
make good decisions.
We noticed that they considersensible information when
they're deciding which savingsproducts to invest in and how to
pay down their debts.
We did find that there are areasthat some providers might have
(01:04):
an opportunity for improvementaround making sure that their
products are meeting the needsof all their customers.
SPEAKER_01 (01:09):
I see that you found three areas where knowledge and
behaviour don't match people'saspirations.
What's that telling us?
SPEAKER_00 (01:17):
We're interested to find that most people say when
they're looking for a savingsproduct, the main thing they
look for is a high return.
So they're interested in whatinterest rate they can get or
what kind of dividend paymentthey can expect.
But then when we ask them whatsavings do you actually have,
most people are holding themajority of their savings in
quite low returns products.
(01:37):
So that was really interesting.
Now, there's a number of reasonsthat could be behind that, but
it does suggest that there mightbe reason for a little more
careful thought for some people.
SPEAKER_01 (01:45):
Any other interesting things come up in
the
SPEAKER_00 (01:46):
research?
Yes, we were interested to findthat a lot of people hold by now
pay later debt.
So this is like after pay.
This is interesting because wedidn't realise quite how
prevalent that was.
And it's a product that requiresa different type of thinking for
people to manage that debtrelative to traditional debt
(02:07):
that has an interest rate.
So we thought that's definitelyworth keeping an eye on and
making sure that people aremanaging their debt in a way
that's sensible.
Anything else?
Yes, something else we found wasa lot of consumers are
surprisingly uncomfortablediscussing their finances.
So we asked, would you be opento receiving advice about how to
manage your finances?
And they mostly said, yes, yes,of course, advice would be
(02:29):
great.
But then later we asked them,how comfortable do you feel
discussing your finances withother people?
And the response was actuallynot that comfortable at all.
So although they would like toreceive guidance, their
emotional comfort with doing sois maybe not where it could be.
SPEAKER_01 (02:44):
Did you find anything out about
SPEAKER_00 (02:47):
term deposits?
We found that there's somereally interesting demographic
differences around the holdingsof term deposits.
So when we broke down ourfindings into age categories, we
found that people aged 65 andover have some really unique
features.
One is that these older peopleare very interested in receiving
a stable return.
(03:07):
So they're after an interestrate that doesn't change all the
time, so that it's predictable.
And we also found that they dohold term deposits a lot more
than people in younger agegroups.
We think that's probably becausetheir KiwiSaver has either
matured or maybe they didn'thave KiwiSaver to begin with.
So instead, they're holdingtheir investments in term
deposits.
SPEAKER_01 (03:28):
You also took a look at these questions, but viewed
through the lens of age andethnicity.
What can you tell us there?
SPEAKER_00 (03:34):
Yes, we decided to have a look at the survey
responses in terms of whichpopulations are having the
hardest time.
And there's a couple ofdifferent ways of looking at
that question.
We found that young people areamong the most financially
vulnerable.
So their level of But then wefound that people of middle age
are actually struggling themost.
(03:55):
When we looked at ethnicity, wefound that Māori and Pasifika
communities are struggling themost.
So that was really interesting.
SPEAKER_01 (04:02):
So when you say that young people are financially
vulnerable, talk to us a bitmore about that.
SPEAKER_00 (04:07):
We found that people aged under 24 in our survey were
the least comfortable withdiscussing their finances with
others.
So that means that they're lesslikely to seek financial advice.
So that means they might belacking some of that guidance
that they need.
They also rated themselves asthe least confident in being
able to make good financialdecisions.
(04:27):
And when we asked them somefinancial literacy questions, we
also found this group were theleast likely to get those
questions right.
So there's a couple of differentdimensions where they might feel
that they're not as wellsupported as they could be.
SPEAKER_01 (04:39):
Are there any other age groups where you found
something interesting?
SPEAKER_00 (04:42):
Yes, we actually found people of middle age are
among the most strugglingpeople.
So when we asked them thequestion, thinking about your
finances, would you say you'resinking or swimming?
One in four people of thismiddle age group said that they
were sinking, which is actuallyquite high when you think about
it.
That's quite concerning.
It is quite concerning.
They also said these middle agepeople, they They struggle to
(05:04):
pay for food sometimes andkeeping up with their debt
repayments can be really hard.
So it's worth considering whatthat demographic really
SPEAKER_01 (05:12):
need.
And you mentioned that there areparticular ethnic groups that
are struggling as well.
What can you tell us about that?
SPEAKER_00 (05:21):
So with the Māori and Pasifika community, we asked
the same question, are yousinking or swimming with your
finances?
And we found that one in four ofthese people also said they're
sinking.
So that's concerningly high forsuch a large population of
people.
there were some reallyinteresting things within that
population as well.
One thing we found was that whenseeking financial guidance,
(05:43):
Māori are just as likely to turnto a family member as they are
to go to their bank.
Now that's really interesting.
Family is a great source offinancial guidance.
It's really important to talk toprofessionals as well to get
their expert opinion.
So we want to make sure that nocommunity is missing out on that
professional guidance.
SPEAKER_01 (06:00):
Can you tell us the experience that Māori and
Pasifika are having with debt?
UNKNOWN (06:05):
Yes.
SPEAKER_00 (06:05):
We found that in that population, there's quite a
large number of people using buynow, pay later debt.
So I mentioned that around aquarter of New Zealanders have
this type of debt.
In the Maori and Pasifikapopulation, it's 40%.
So that's really high.
Now, this type of debt is agreat way to spread payments out
through time and maybe cover abill that might be a little bit
(06:27):
on the large side for you.
But if you have a lot of it, itcan really add up and those late
payment fees become a hugeproblem.
So it's definitely worth beingaware that there's this
community which is bothvulnerable in the sense that
they say that we are sinking andthey have a huge amount of buy
now pay later debt.
SPEAKER_01 (06:43):
Gail, can you tell us what financial services
providers could take from thisresearch?
SPEAKER_00 (06:49):
Our research reflects the diversity and the
complexity of the consumerlandscape here in New Zealand.
So organisations like banks,insurance companies, managed
fund providers, even financialadvisors will find that there's
some areas of this research thatreflect their experience with
consumers and some that maybedon't because it is a diverse
group of people.
(07:09):
I think if I was a provider, thebig takeaway that I would be
looking at is people's level ofcomfort with talking about their
finances.
It's really, really importantthat people can feel safe to
access useful guidance abouttheir financial decision making.
And so anything a provider mightbe able to do to be
approachable, to make sure thatpeople do feel comfortable, I
(07:29):
think it's really worthinvesting in that.
None of the things that we'vefound, which we're describing as
areas for improvement, are badthings.
It's all just areas ofopportunity.
There are places where consumersmight feel that they could be
served a little bit better ifproducts were maybe designed
slightly differently.
There's an opportunity forproviders to think about whether
that's part of what they want todo.
(07:51):
But it doesn't mean thatanything is going wrong out
there.
SPEAKER_01 (07:54):
Well, that is good news.
And a great positive note to endthe podcast.
So thanks very much for yourtime today, Gail.
SPEAKER_00 (08:01):
Thank you.
SPEAKER_01 (08:03):
If you'd like to access this research, check out
our website www.fma.govt.nz.
See you next time.
Kia ora, and welcome to the FMA's Occasional
Conversation Series podcast,where we talk about the latest
research that we've been workingon.
I'm joined today by Gail Price,Head of Economics and Research
at the FMA, whose team is behindthe latest piece of research
called Good Sense Kiwis onSavings and Debt.
Welcome, Gail.
(00:21):
Hi, Heidi.
Can you tell us about thisresearch and what you've found?
SPEAKER_00 (00:25):
Absolutely.
We wanted to know what NewZealand consumers think about
savings and debts.
We were interested in theirattitudes to savings and also
what types of savings and debtproducts they use.
We also asked about what typesof financial institutions they
work with around their savingsand their debts.
SPEAKER_01 (00:41):
And what did you find?
We
SPEAKER_00 (00:43):
found that most people are pretty comfortable
with their experience aroundsavings and debt.
They feel like they're wellinformed and they know how to
make good decisions.
We noticed that they considersensible information when
they're deciding which savingsproducts to invest in and how to
pay down their debts.
We did find that there are areasthat some providers might have
(01:04):
an opportunity for improvementaround making sure that their
products are meeting the needsof all their customers.
SPEAKER_01 (01:09):
I see that you found three areas where knowledge and
behaviour don't match people'saspirations.
What's that telling us?
SPEAKER_00 (01:17):
We're interested to find that most people say when
they're looking for a savingsproduct, the main thing they
look for is a high return.
So they're interested in whatinterest rate they can get or
what kind of dividend paymentthey can expect.
But then when we ask them whatsavings do you actually have,
most people are holding themajority of their savings in
quite low returns products.
(01:37):
So that was really interesting.
Now, there's a number of reasonsthat could be behind that, but
it does suggest that there mightbe reason for a little more
careful thought for some people.
SPEAKER_01 (01:45):
Any other interesting things come up in
the
SPEAKER_00 (01:46):
research?
Yes, we were interested to findthat a lot of people hold by now
pay later debt.
So this is like after pay.
This is interesting because wedidn't realise quite how
prevalent that was.
And it's a product that requiresa different type of thinking for
people to manage that debtrelative to traditional debt
(02:07):
that has an interest rate.
So we thought that's definitelyworth keeping an eye on and
making sure that people aremanaging their debt in a way
that's sensible.
Anything else?
Yes, something else we found wasa lot of consumers are
surprisingly uncomfortablediscussing their finances.
So we asked, would you be opento receiving advice about how to
manage your finances?
And they mostly said, yes, yes,of course, advice would be
(02:29):
great.
But then later we asked them,how comfortable do you feel
discussing your finances withother people?
And the response was actuallynot that comfortable at all.
So although they would like toreceive guidance, their
emotional comfort with doing sois maybe not where it could be.
SPEAKER_01 (02:44):
Did you find anything out about
SPEAKER_00 (02:47):
term deposits?
We found that there's somereally interesting demographic
differences around the holdingsof term deposits.
So when we broke down ourfindings into age categories, we
found that people aged 65 andover have some really unique
features.
One is that these older peopleare very interested in receiving
a stable return.
(03:07):
So they're after an interestrate that doesn't change all the
time, so that it's predictable.
And we also found that they dohold term deposits a lot more
than people in younger agegroups.
We think that's probably becausetheir KiwiSaver has either
matured or maybe they didn'thave KiwiSaver to begin with.
So instead, they're holdingtheir investments in term
deposits.
SPEAKER_01 (03:28):
You also took a look at these questions, but viewed
through the lens of age andethnicity.
What can you tell us there?
SPEAKER_00 (03:34):
Yes, we decided to have a look at the survey
responses in terms of whichpopulations are having the
hardest time.
And there's a couple ofdifferent ways of looking at
that question.
We found that young people areamong the most financially
vulnerable.
So their level of But then wefound that people of middle age
are actually struggling themost.
(03:55):
When we looked at ethnicity, wefound that Māori and Pasifika
communities are struggling themost.
So that was really interesting.
SPEAKER_01 (04:02):
So when you say that young people are financially
vulnerable, talk to us a bitmore about that.
SPEAKER_00 (04:07):
We found that people aged under 24 in our survey were
the least comfortable withdiscussing their finances with
others.
So that means that they're lesslikely to seek financial advice.
So that means they might belacking some of that guidance
that they need.
They also rated themselves asthe least confident in being
able to make good financialdecisions.
(04:27):
And when we asked them somefinancial literacy questions, we
also found this group were theleast likely to get those
questions right.
So there's a couple of differentdimensions where they might feel
that they're not as wellsupported as they could be.
SPEAKER_01 (04:39):
Are there any other age groups where you found
something interesting?
SPEAKER_00 (04:42):
Yes, we actually found people of middle age are
among the most strugglingpeople.
So when we asked them thequestion, thinking about your
finances, would you say you'resinking or swimming?
One in four people of thismiddle age group said that they
were sinking, which is actuallyquite high when you think about
it.
That's quite concerning.
It is quite concerning.
They also said these middle agepeople, they They struggle to
(05:04):
pay for food sometimes andkeeping up with their debt
repayments can be really hard.
So it's worth considering whatthat demographic really
SPEAKER_01 (05:12):
need.
And you mentioned that there areparticular ethnic groups that
are struggling as well.
What can you tell us about that?
SPEAKER_00 (05:21):
So with the Māori and Pasifika community, we asked
the same question, are yousinking or swimming with your
finances?
And we found that one in four ofthese people also said they're
sinking.
So that's concerningly high forsuch a large population of
people.
there were some reallyinteresting things within that
population as well.
One thing we found was that whenseeking financial guidance,
(05:43):
Māori are just as likely to turnto a family member as they are
to go to their bank.
Now that's really interesting.
Family is a great source offinancial guidance.
It's really important to talk toprofessionals as well to get
their expert opinion.
So we want to make sure that nocommunity is missing out on that
professional guidance.
SPEAKER_01 (06:00):
Can you tell us the experience that Māori and
Pasifika are having with debt?
UNKNOWN (06:05):
Yes.
SPEAKER_00 (06:05):
We found that in that population, there's quite a
large number of people using buynow, pay later debt.
So I mentioned that around aquarter of New Zealanders have
this type of debt.
In the Maori and Pasifikapopulation, it's 40%.
So that's really high.
Now, this type of debt is agreat way to spread payments out
through time and maybe cover abill that might be a little bit
(06:27):
on the large side for you.
But if you have a lot of it, itcan really add up and those late
payment fees become a hugeproblem.
So it's definitely worth beingaware that there's this
community which is bothvulnerable in the sense that
they say that we are sinking andthey have a huge amount of buy
now pay later debt.
SPEAKER_01 (06:43):
Gail, can you tell us what financial services
providers could take from thisresearch?
SPEAKER_00 (06:49):
Our research reflects the diversity and the
complexity of the consumerlandscape here in New Zealand.
So organisations like banks,insurance companies, managed
fund providers, even financialadvisors will find that there's
some areas of this research thatreflect their experience with
consumers and some that maybedon't because it is a diverse
group of people.
(07:09):
I think if I was a provider, thebig takeaway that I would be
looking at is people's level ofcomfort with talking about their
finances.
It's really, really importantthat people can feel safe to
access useful guidance abouttheir financial decision making.
And so anything a provider mightbe able to do to be
approachable, to make sure thatpeople do feel comfortable, I
(07:29):
think it's really worthinvesting in that.
None of the things that we'vefound, which we're describing as
areas for improvement, are badthings.
It's all just areas ofopportunity.
There are places where consumersmight feel that they could be
served a little bit better ifproducts were maybe designed
slightly differently.
There's an opportunity forproviders to think about whether
that's part of what they want todo.
(07:51):
But it doesn't mean thatanything is going wrong out
there.
SPEAKER_01 (07:54):
Well, that is good news.
And a great positive note to endthe podcast.
So thanks very much for yourtime today, Gail.
SPEAKER_00 (08:01):
Thank you.
SPEAKER_01 (08:03):
If you'd like to access this research, check out
our website www.fma.govt.nz.
See you next time.
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