Half of working kiwis could survive one month on savings

Tuesday 14th July 2009

Almost half of working New Zealanders have only enough savings to survive for a month if they lost their jobs, according to a survey from Dun & Bradstreet.

In its outlook for the third quarter, the research firm’s survey found that 45% of New Zealanders have only a month of savings behind them and 28% plan to use credit to pay their bills.

The results of the Consumer Credit Expectations Survey sound an ominous warning that more people in New Zealand, which has a dismal savings record, could get into financial difficulties as the jobless rate grows. The unemployment rate is expected to peak above 7% next year from 5% currently, as companies trim costs and lay off staff to adjust to falling demand.

“Deteriorating employment conditions are of significant concern,” said John Scott, general manager at D&B New Zealand. Some New Zealanders could be forced into “deeper financial difficulty before things improve,” he said in a statement.

The survey showed 36% of those polled plans to reduce spending in the months ahead while 13% plan to spend more. Some 20% expect to apply fro new credit in the third quarter, while 7% will seek an increase to their credit limit.

On major purchases, 29% said they would make one in the third quarter while a further 58% said they would delay the outlay on a planned purchase. About 82% said the purchase would be made from savings.

Household debt is expected to rise in coming months, according to 18% of respondents, while 25% see debt levels reducing.The youngest workers were expecting the most difficult, with 55% of those aged 18-34 saying they could only survive a month on their savings.

Businesswire.co.nz

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