New Zealanders are still finding it tough financially with little reprieve expected in the next 12 months, according to Ipsos New Zealand’s latest edition of Understanding Aotearoa New Zealand: Cost of Living report.
The survey of 1,002 New Zealanders aged 18 and older, online between 24 February and 02 March 2025, tracks how New Zealanders feel about their finances and their expectations for the next 12 months.
The research firm says in a statement that the key findings include:
- One in four (26 percent) New Zealanders are finding it difficult to manage financially. This figure has remained relatively steady in the last two years but represents a 6ppt increase since monitoring began in May 2022.
- Low-income households are disproportionately affected by financial difficulties, with a 13ppt increase in those who report finding it difficult since May 2022.
- Nearly half (47 percent) are worried about their job security, with women significantly more likely than men to be concerned (54 percent women vs. 39 percent men). Two in three (65 percent) also believe that unemployment will rise in the next year.
- Of those who are worried about their job security, 83 percent say they are spending less, indicating a correlation between job security and consumer confidence.
- The vast majority of New Zealanders are expecting increases in household spending, particularly on essentials like food (80 percent), utilities (80 percent) and other household shopping (75 percent).
- 41 percent think their disposable income will decrease in the next year, and fewer than a quarter (22 percent) expect an improvement in their standard of living.
- Despite growing expectations that interest rates will fall (45 percent, a significant 21ppt increase from May 2024), the majority (52 percent) still believe that inflation will rise in the next 12 months. A similar proportion (49 percent) believe that it will take more than 12 months for inflation to return to normal in New Zealand, while 15 percent do not expect inflation to ever return to normal.
- The state of the global economy is perceived to be top factor contributing to the cost of living in New Zealand (80 percent). This is followed by interest rate levels and government policies (73 percent).
“New Zealanders are not making the connection between reductions in the OCR to an improvement in living costs…
Carin Hercock, country manager, Ipsos New Zealand, says the report gives some insight as to why New Zealanders still see inflation as the most important issue facing New Zealand.
“New Zealanders are not making the connection between reductions in the official cash rate to an improvement in living costs. Instead, the majority believe that major household costs like groceries, power and insurance will continue to increase in the next six months.”
Amanda Dudding, executive director public affairs, Ipsos New Zealand, says much of the uncertainty in the report is coming from a belief that unemployment will continue to rise in New Zealand this year “and this sentiment seems to be particularly impacting women, with 54 percent worried about their own job security. This could be a carry-over from Covid when we saw under-utilisation rates disproportionately impacting women”.
