Full Breakdown
New Zealanders Turn to Debt as Living Costs Rise
7/23/2026, 5:36:27 AM
Core Findings of the Kiwibank State of Savings Index
The third-annual State of Savings Index, surveyed by Talbot Mills, shows that 40 % of New Zealanders have taken on debt in the past 12 months to cover rising living costs. At the same time, the share of people who regularly save edged up to 44 %, while 59 % report maintaining a household budget and 85 % say they broadly stick to it. The index also notes that 28 % of respondents could not cover an unexpected $500 expense without borrowing, selling an asset, or using a credit card.
Demographic and Product Breakdown
Among the debt-taking respondents, 19 % used Buy-Now-Pay-Later (BNPL) schemes, 12 % borrowed from family or friends, 8 % obtained personal bank loans, and 7 % increased credit-card limits. Age-group data reveal that 61 % of those under 30 relied on debt, compared with 55 % of 30-44-year-olds, 35 % of 45-59-year-olds, and 15 % of those 60 and over. Renters, Maori and Pacific peoples were “significantly more likely” to incur debt than NZ Europeans, according to the report.
Official Commentary from Kiwibank and Analysts
Senior economist Satish Ranchhod observed that households have cut discretionary spending, delayed travel, and altered grocery shopping habits, while grocery nominal spend rose 3.5 % and transaction volume only 1.8 % over the June quarter.
Broader Economic Implications
Analysts note that debt-funded demand reverses faster than income-funded demand, leaving a thin household buffer. Inflation eased to 3.1 % annual CPI in the March 2026 quarter, but electricity, council rates, and meat prices remained high. A potential 10 % jump in global oil prices could push pump prices above $3 per litre, threatening to erode the already fragile buffer for households financing groceries.
Emerging Financial-Tech Tools
The survey found 12 % of respondents use AI for budgeting and savings advice, with 64 % rating it helpful. Awareness of open-banking concepts stood at 52 %, indicating growing interest in digital tools that can automate payments and budgeting.
