Our latest State of the Investor Nation report shows Kiwi are well on the way to recovering from the financial impacts of COVID-19.
It’s not every day the world is hit by an unprecedented global pandemic, but the grass is starting to get greener on the other side of 2020.
Over a quarter of Kiwi are feeling wealthier than they did 12 months ago, with growing confidence in the New Zealand economy playing a big part.
But for those who aren’t investing or don’t own property, the recovery from COVID-19 has been more difficult. The lockdowns in 2020 left many young people and renters feeling more wealthy, with reduced spending making it easier to save. A year later, some have managed to turn this into a more durable sense of wealth – while others are back where they started.
Our most recent State of the Investor Nation Survey, conducted in May and June 2021, gives a unique insight into what’s happening in our economy and how Kiwi are feeling about it.
Are we back on our feet?
After the tumble taken by the economy in 2020, the country’s most up-to-date survey of New Zealander’s perceptions of wealth, investment, and material wellbeing shows a major rebound since July 2020. The number of Kiwi struggling to make ends meet is down to 4%, nearly half as many as last year. Things are also trending up for Kiwi who have assets and investments, who are starting to feel wealthier and more confident in the economy than they did at the same time last year.
Can money buy happiness?
Despite the old saying, those who are feeling wealthier and more confident in global markets are also feeling happier. Our findings show that those who have enough money to do everything they want are 3x more likely to be happy than those who are still struggling to make ends meet. Despite the dip in reported general happiness mid-last year due to the pandemic, Kiwi are feeling happier than they did before the pandemic (up from 69% to 71%).
The report shows that this is being driven most by 35- to 54-year-olds and mid-income earners, who were most likely to show an improvement in their financial position over the last 12 months.
While the tide is rising for the majority of Kiwi, there are still plenty of people who are stressed about money and struggling to make ends meet. Findings show that improvements in wealth perceptions and happiness are still ultimately defined by whether Kiwi own assets or not. Those without assets are most commonly lower income earners, renters, and young people.
Ready to invest?
While there was a significant increase in the proportion of lower/middle income earners and homeowners with investments in June 2020, there’s been a decline among both groups since then. For many, the key barrier stopping them from investing is a feeling that they don’t know enough or how to do it, as well as a general sense that investing just isn’t for them. These concerns also skew considerably higher for women thinking about getting into investing.
Especially given the correlation between financial stability and happiness, these high barriers are not only contributing to increasing the gap between the have’s and the have-not’s in terms of financial wellbeing, but also in general wellbeing. That this also disproportionately impacts women is deeply concerning as well.
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Read the full 2021 Kiwi Wealth State of the Investor Nation Report for more insights on how New Zealander’s are feeling about their wealth and the economy.