{"id":463,"date":"2025-09-04T05:36:07","date_gmt":"2025-09-04T05:36:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/463\/"},"modified":"2025-09-04T05:36:07","modified_gmt":"2025-09-04T05:36:07","slug":"rising-costs-continue-to-outpace-incomes-as-kiwis-strive-to-keep-up-financially","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/463\/","title":{"rendered":"Rising costs continue to outpace incomes as Kiwis strive to keep up financially"},"content":{"rendered":"

\u201cIt\u2019s really hard to keep monitoring and measuring everything when you\u2019re on a low income<\/a> and it becomes a constant source of worry.\u201d<\/p>\n

As a solo parent, she said even a pay rise wouldn\u2019t show fully in her take-home pay because of the abatement rates that apply to the Government support available.<\/p>\n

She calculated that, although she is not earning at that level, someone in her position receiving a pay rise<\/a> from $100,000 to $130,000 a year would only get about $200 more a week after tax.<\/p>\n

Infometrics data shows how incomes have kept up, or haven\u2019t, with the rising cost of living over recent years.<\/p>\n

In the years immediately after the Covid-19 pandemic, lower-income households felt the most pressure but more recently the squeeze had gone on higher incomes.<\/p>\n

Since 2020, no one has avoided a year in which their increase in costs was more than their increase in income.<\/p>\n

In 2022, median incomes of the lowest-earning quintile rose by 9% more than the increase in living costs. The highest earners lifted by 4.9%.<\/p>\n

In 2023, as the sharpest impact of inflation<\/a> was felt, expenses for the lowest-earning households rose 3.5% more than income. The highest earners\u2019 income only had an increase in costs over income of 1.8%.<\/p>\n

Last year, the lowest income quintile had an income increase of 0.7% more than costs, and the second-to-bottom lifted by 1.3%. The top two income quintiles had income growth that lagged cost rises by 1.7% and 1.3% respectively.<\/p>\n

Infometrics chief forecaster Gareth Kiernan said higher-income households were more heavily affected by interest rates, which were captured in this data, but not in Consumers Price Index inflation.<\/p>\n

\u201cIn 2022 and 2023, everything was rising in price, it was hard to avoid.\u201d<\/p>\n

He said the labour market was still weakening at the same time as another bout of inflation was felt \u201cin specific areas of unavoidable costs for people\u201d.<\/p>\n

\u201cIn the current year, we\u2019re probably going to be going backwards a bit again on average.\u201d<\/p>\n

North Shore Budgeting Services financial mentor David Verry said lower-income earners were still feeling the most pain.<\/p>\n

Some had reduced incomes and it was not unusual to see rent taking up 50-70% of after-tax income. He said lower-income earners usually had interest-bearing debt that often pushed them over the edge.<\/p>\n

Another financial mentor, Shula Newland, said power bill increases have hit hard.<\/p>\n

\u201cPeople have been getting power bills over $400 \u2013 huge bills.\u201d<\/p>\n

Lower-income households were more likely to have to cut food and other essential spending, while higher-income households were cutting down on entertainment, she said.<\/p>\n

Consumer NZ said 67% of people listed the cost of living as a top-three concern in its most recent sentiment tracker, which was a record \u2013 up from 65% in April and 58% a year ago. Food and power bills were key concerns.<\/p>\n

In some cases, other economic changes were making the difference.<\/p>\n

When Jess\u2019 husband lost his job in the public service, their attention was forced on to their household budget.<\/p>\n

\u201cWe\u2019ve had a massive, massive reduction in household income,\u201d she said.<\/p>\n

The Wellington parents of two, whom RNZ agreed not to name, had savings that would help a bit, but while it took a long time to build up that saved money, Jess said it disappeared at terrifying speed.<\/p>\n

\u201cThe challenge is basically trying to cut as much as we can to make that disappear as slowly as possible,\u201d she said. \u201cWe\u2019re fortunate to have the savings, but it\u2019s that real uncertainty of how long we\u2019re going to be in this situation.\u201d<\/p>\n

As soon as they knew he was losing his job, they cut discretionary spending. They tried to only use their EV and charge it overnight, and cut takeaways, as well as being more careful with food spending and \u201chaving to say no\u201d to their teenagers\u2019 requests for money.<\/p>\n

\u201cWe were quite lucky that we had things that we could cut out, you know, the takeaways and we used to have a cleaner.\u201d<\/p>\n

Now, when things like bills for kids\u2019 sports fees came in, they felt quite different. She also tried to put off spending because she hoped the income reduction was only temporary.<\/p>\n

\u201cMy work shoes are falling apart and I\u2019m, like, I reckon if I glue them, I can get another month and maybe that\u2019s going to be long enough. I guess it\u2019s quite different from people who are on lower incomes and it\u2019s like this is how it\u2019s going to be.\u201d<\/p>\n

If they were forced to rely on one income for a longer period, she said they may have to reconsider whether they could cope with their mortgage. When her husband did find a job, it would likely be at a lower income.<\/p>\n

They were also trying to cut back their power bill.<\/p>\n

\u201cWe\u2019re not going really overboard, but trying to slightly rein in the kids\u2019 showers and think about which rooms do we need to heat, that kind of thing.\u201d<\/p>\n

Jess said, in general, a lot of people seemed to still be struggling.<\/p>\n

\u201cI feel like a lot of people are in our position of going \u2018do we need to get that coffee out?\u2019 or \u2018I\u2019m making my lunch at home every day\u2019,\u201d she said. \u201cPeople who are in the public service, at least, even if you have a job, you\u2019re kind of like, \u2018I\u2019d better behave as though I might not be keeping it\u2019.\u201d<\/p>\n

\u2013 RNZ<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cIt\u2019s really hard to keep monitoring and measuring everything when you\u2019re on a low income and it becomes…\n","protected":false},"author":2,"featured_media":464,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[806,138,803,802,813,811,805,809,807,111,139,69,804,801,808,812,61,810],"class_list":{"0":"post-463","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-as","9":"tag-business","10":"tag-continue","11":"tag-costs","12":"tag-edmunds","13":"tag-financially","14":"tag-incomes","15":"tag-keep","16":"tag-kiwis","17":"tag-new-zealand","18":"tag-newzealand","19":"tag-nz","20":"tag-outpace","21":"tag-rising","22":"tag-strive","23":"tag-susan","24":"tag-to","25":"tag-up"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=463"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/463\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/464"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}