Even households earning $220,000 struggling to get ahead as living costs bite

Summarised by Centrist

New Zealand families earning more than $200,000 a year say mortgage payments, groceries and other household costs are leaving little room for savings.

A Sunday Star-Times investigation found even high-income households cutting back on travel, shopping and family visits to make ends meet.

A Hutt Valley couple earning up to $240,000 shop second-hand and avoid unnecessary travel, while a Hawke's Bay father earning $220,000 says his family struggles to save.

"I thought when I was growing up, if I was earning the amount of money that I'm earning now, that I wouldn't have any complaints and that life would be comfortable," he said.

The experiences reflect broader findings from the University of Otago's latest New Zealand Consumer Lifestyles report.

The survey classified 27% of respondents as financially struggling, up from 16.5% in 2020. Those in this group were commonly middle-income earners, with relatively high rates of university education, full-time employment and homeownership with a mortgage.

Across all respondents, 40% reported difficulty paying for essentials, while 52% had gone without something they would normally purchase to cover necessary expenses.

Economist Shamubeel Eaqub cautioned that income alone gives an incomplete picture of financial security. Household size, housing costs and location make a substantial difference. A family of five earning $150,000, for example, has roughly the same income-adjusted living standard as a single person earning $60,000.

Renters generally remain more financially vulnerable than homeowners, with Eaqub noting that 53% of renters fall within the bottom two income quintiles.

Salvation Army foodbank team leader Joel Williams said increasing numbers of working people, including homeowners and those juggling multiple jobs, were seeking food assistance.

"We're essentially subsidising a broken system that's no longer serving the people," he said.

The Otago survey also found 48% of respondents believed New Zealanders needed to leave the country to get ahead financially, compared with 28% in 2020.

Read more at The Post (paywalled)

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