Kiwibank survey shows nearly half of all Kiwis raided long-term savings to survive

Wednesday, 30 July 2025

Research commissioned by Kiwibank indicates that 48% of adults have dipped into long-term savings (excluding KiwiSaver) in the past year to cover short-term expenses.

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Hard times make for hard choices, the Kiwibank State of Savings Index shows, with nearly half of people having dipped into their long-term savings in the past year to cover short-term expenses.

Kiwibank’s data, released on Wednesday morning, showed mixed signs that the economic recovery the Government believes is under way is filtering through into personal finances.

In last year’s Kiwibank State of Savings Index 39% of people said they were regularly saving (not including into KiwiSaver), but that had risen to 43% in the 2025 index, although the maximum sampling error for the consumer survey was 3.1%, indicating only a weak increase.

However, in last year’s survey 41% of people said they had dipped into personal savings in the preceding 12 months to pay for short-term expenses, compared to 48% in this year’s survey, which was carried out on 1040 adults in June.

The survey backing the index asked questions to identify business owners, and ask them about the state of their businesses.

It showed favourable support for Government measures, with most reporting it was promoting growth.

Kiwibank chief executive Steve Jurkovich said: “60% of businesses see Budget 2025 as pro-growth, and 83% of large businesses say it supports capital investment.”

“That kind of confidence matters. We’re also seeing strong signals that these policies are unlocking action with over a third of businesses saying the 20% asset tax deduction will encourage new investment, help build financial buffers or accelerate plans already under way,” Jurkovich said.

But the surveying of business owners showed a big split between large companies employing 100 or more people, and smaller businesses.

Just a quarter (26%) of sole traders reported improved financial positions, compared to 82% of larger businesses.

The Government has also won support for its KiwiSaver changes in Budget 2025, which effectively cut government spending on KiwiSaver, but should result in higher retirement nest-eggs for many by lifting contribution rates for workers and their employers.

Jurkovich said 58% of businesses supported the planned KiwiSaver changes, though it would cost them more, unless they used the legal total remuneration loophole, which some employers use so they don’t have to make KiwiSaver contributions.

Among the general population 67% supported increasing employee and employer contributions. Many claimed, when asked, that they would support being required to save more, with 68% claiming to think that KiwiSaver should be made compulsory.

That 68% figure was far higher than the 47% of people who said they were “fully aware” of their own current KiwiSaver choices of which fund they were in, and how it was performing.

Kiwibank chief executive Steve Jurkovich says, ‘We’re encouraged to see progress. Young people are showing real savings discipline, and financial confidence is on the rise.’

One continued misery for many households was a lack of financial “resilience” as measured by their ability to cover an emergency $500 expense. Almost a third of people (32%) said they would be able to cover such an expense without going into debt.

Kiwibank asked people about an old idea to launch a KiwiSaver-style emergency savings scheme to help people amass emergency savings as well as retirement nest eggs, and 73% thought it was a good idea.

Evidence presented to MPs last week on the state of irresponsible and unsustainable personal lending said one in eight people seeking help from financial mentors were seeking to have their KiwiSaver money released early under hardship rules, devastating their retirement nest eggs.

The biggest barrier to saving was the cost of living, survey respondents said in interviews with Talbot Mills Research, which Kiwibank hired to gather data for its savings index.

Jurkovich said he was encouraged to see an increase in the past 12 months in younger people setting goals and saving, but said there were higher proportions of Māori, Pacific and women struggling to save than other parts of the population.

That was a result of lower average incomes, but Jurkovich said: “Regardless of income bracket, people that identify as Asian were much more resilient to being able to say they could pay a one-off expense in bills. So, there is some cultural elements maybe as well.”

Christchurch is a city of opportunity for the young thanks to a better balance of property prices and incomes, and better public transport than Auckland.

There were significant regional differences shown in the survey, Jurkovich said. South Islanders were faring better than North Islanders.

“It’s definitely showing that the south is outperforming the north. We opened a regional office in Christchurch last Monday. That’s to account for team members who want to place themselves in Christchurch [having] tripled in the last three years.”