Loan Arrears Still A Big Concern For Kiwi Households
Arrears on personal loans are also creeping higher. In fact, theyve now exceeded 10% for the second month in a row. While this is partly due to holiday timing (Easter and ANZAC fell at the end of the month), its still a reminder that many Kiwis …
Fresh numbers from the May 2025 Centrix Credit Indicator reveal that while some early signs of improvement are emerging in the economy, many Kiwis are still struggling to keep up with their debts — particularly long-term loans.
In April, consumer arrears sat at 12.43%, meaning around 483,000 New Zealanders were behind on at least one repayment. That's slightly better than March, but not cause for celebration just yet.
More concerning is the number of people who are 90+ days overdue, which has jumped to 83,000, the highest since July last year.
Loansmart Managing Director Murray Greig says, 'this is a clear sign that many households are still stretched thin and finding it tough to bounce back.'
Mortgage Arrears Show Slight Improvement
There is a little bit of good news. Mortgage arrears dropped to 1.49% in April, which means fewer home loan holders are falling behind. That's 1,400 fewer past-due mortgages than the previous month.
But dig a bit deeper and the picture's still mixed. Long-term home loan delinquencies (90+ days overdue) are up 5% year-on-year, and missed payments in the 30–59 day bracket are up 6%, suggesting some Kiwis are on shaky ground even if they haven't fully defaulted yet.
Personal Loans: A Growing Pressure Point
Arrears on personal loans are also creeping higher. In fact, they've now exceeded 10% for the second month in a row. While this is partly due to holiday timing (Easter and ANZAC fell at the end of the month), it's still a reminder that many Kiwis are relying on short-term borrowing to get by.
When it comes to Buy Now Pay Later (BNPL) services, arrears remain stuck at 8.7%, unchanged from last year – but still very high.
What It All Means
Even though short-term arrears are trending down, long-term arrears are clearly on the rise. That's a red flag.
When people can't catch up after missing a payment or two, debt can quickly spiral out of control. It's not just a financial burden – it becomes a massive stressor on everyday life.
Loansmart Managing Director Murray Greig says, 'We're seeing more Kiwis quietly slipping into long-term debt without a clear way out. That's where smart solutions really matter.'
A Debt Consolidation Loan Could Be Your Way Forward
If you're juggling multiple debts and falling behind, a debt consolidation loan can be a smart move.
It rolls all your existing debts – personal loans, credit cards, even BNPL – into one simple loan, with one regular repayment and a potential drop in total interest costs.
Key Benefits:
One affordable repayment
Lower interest rates
Less stress, more control
Help to improve your credit score over time
With interest rates starting from 9.95%, Loansmart provides fast, fair and flexible options to help you get ahead.
Let's Make a Plan Together
At Loansmart, we've helped thousands of Kiwis regain financial confidence since 2008. We don't just offer loans – we offer solutions. And we'll work with you to find the smartest one.
3-minute application
Approval in as little as 1 hour*
Same-day payout options*
Want to see how much you could save? Use our loan calculator, or chat with our friendly team for a free, no-obligation loan assessment.
*Subject to responsible lending checks and criteria.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NZ Herald
2 hours ago
- NZ Herald
Covid spending can be justified, despite Treasury report
Coverage of this report has focused on an implication that Treasury were opposed to much of the Covid-19 response and had sought to limit the extent of Government spending. Others have noted that the report does not say this directly, though the selective quotes from advice at different stages do not exactly discourage this reading. In the interests of full disclosure, I was an adviser to the Minister of Finance Grant Robertson from December 2020 onwards. Unsurprisingly, my perspective often differed from Treasury (which in some ways was a key required skill for that job), and readers may reasonably take that into account in the criticisms that follow. The risks highlighted in the report around the use of fiscal policy tend to underline the view that 'cyclical management should mostly be left to monetary policy run by an independent central bank'. This is not a new position – it is such an established aspect of economic orthodoxy that it is known as the 'consensus assignment'. Finance Minister Grant Robertson during the pandemic. Photo / Pool Why, then, would we use fiscal policy in response to a shock? Recent decades have seen very low interest rates, and therefore situations where central banks cannot cut rates to the level they believe necessary to support the economy. This issue is known as the 'effective lower bound' and was one of the major preoccupations of economic debates following the global financial crisis. However, it was clear that Treasury had done limited thinking on how fiscal policy should be used in a crisis. This was despite the fact that the official cash rate was just 1% as the pandemic approached. I recall my surprise at being briefed on a work programme to review Treasury's macro-economic framework – thinking that I would have assumed it had already taken place sometime in the previous decade. At different stages Covid-19 required spending to support overall economic activity (i.e. stimulus) as well as more targeted spending for workers and businesses directly affected by lockdowns. The LTIB notes that Treasury did support large-scale spending responses in the initial stages, but then 'advised shifting towards more targeted fiscal support and recommended against further stimulus from Budget 2022 onwards'. Covid-19-related supports had continued during this period, because large numbers of New Zealanders continued to be affected by Covid-19, most notably during the Auckland lockdowns. But the purpose of this spending was to support people and businesses during a time when normal economic activity was not possible, not to stimulate more economic activity. Despite the large initial cost of the wage subsidy scheme in 2019/20, the largest year for Covid-related spending was actually 2021/22, owing to the combination of business support programmes and the ramping up of the national health response. Former Beehive staffer Toby Moore. Photo / Supplied A further, separate category of spending is funding allocated through the Budget operating allowance, which is typically a mix of new spending and the increased cost of existing spending (cost pressures). In late 2021, the operating allowances for upcoming budgets were increased compared to what was previously signalled. Treasury has at times raised concerns that adjusting future allowances might undermine credibility; however, it was not an uncommon occurrence for parts of Treasury to raise such concerns and for other parts of Treasury to put advice to the Minister suggesting that allowance should increase. It is important to understand that budget allowances are not an end in themselves. Adhering to previously planned allowances come what may does not amount to a sensible fiscal strategy, and governments tend to put more focus on whether those allowances are contributing to them keeping debt or deficit levels in line with their intended objectives. The operating allowance for Budget 2022 was large, at $6 billion. But based on forecasts at the time, that level of spending was consistent with Government debt peaking at a much lower level than earlier forecasts, and the Government's books returning to surplus much earlier, in 2023/24. At the point Treasury states that they were not advising further stimulus, this was very much the Government's view as well. Economic and fiscal forecasts were looking much different from mid-2022 onward, and the economy continued to slow as the Reserve Bank tightened interest rates in response to rising inflation of the sort that was experienced around the world. While larger proportions of budget spending during this period were trying to maintain existing public services in the face of high levels of inflation, the other side of this story is the fact that forecast tax revenue has continually failed to eventuate. Prime Minister Jacinda Ardern during the pandemic. Photo / Mark Tantrum Ahead of Budget 2024, Nicola Willis alluded to a further downgrade in economic and fiscal forecasts, saying 'Sadly, I've learned to dread what comes out of the forecasters' mouths when they come into my office'. If nothing else, this is a sentiment shared across successive offices of the Minister of Finance. Repeated downward revisions of the tax-to-GDP ratio over time means that Budget 2025 forecasts for the current fiscal year are a full 3.3% of GDP lower than what forecasts in mid-2022 had anticipated. This has contributed to OBEGAL surplus getting pushed further out in the forecast period (and more recently, only showing surpluses on the Government's self-invented measure, OBEGALx). If decision-makers had cared only about inflation and nothing else, fiscal policy could potentially have done a lot more to reduce economic activity. With the Government not willing to resort to tax increases, more contractionary fiscal policy would have meant absorbing more of the burden of constraining demand through deteriorating public services, with the Reserve Bank having to do less through the OCR. Given the ongoing pressure on the health system today, we should be glad this was not the path that was taken. But far from being critical of this Budget spending, Treasury was also raising concerns that spending was not high enough. In the half-year update in 2022, Treasury expressed concern about what it described as the largest fall in real government consumption since 1987. As late as October 2022 Treasury was advising the Minister of Finance to increase the allowance for the next Budget from $4.5 billion to $5b. This incongruous array of advice was not a matter of mutinous radicals seizing control of the Government's lead economic adviser. Treasury was trying to tread the same narrow path that the Government was. The economy as a whole was hitting up against its capacity, and vulnerable New Zealanders needed targeted support towards the cost of living. Every dollar of additional spending risked adding to inflation and every dollar of spending that was withheld meant that rising costs would hit core government services or households directly. It is appropriate that we try to learn lessons from the experience of Covid-19. It is reasonable for people to disagree with some aspects of the fiscal response and it is highly unlikely that every decision taken was the right one. But the economic response was overwhelmingly guided by officials' advice rather than contrary to it. There may now be unease among some public servants about the level of debt that New Zealand assumed or the spending pressures that it is facing. But the other side of that debt is the businesses that are still operating, the people who were kept in work and the loss of friends and family members that were avoided because NZ chose to support each other through that most complex and challenging time. Toby Moore is a doctoral candidate at Te Herenga Waka - Victoria University of Wellington and was previously a senior adviser to former Finance Minister Grant Robertson. He is also on the Labour Party's policy council, though the views here are his own
NZ Herald
2 hours ago
- NZ Herald
‘You are surrounded by Gordon Ramsays, and you become Gordon ... otherwise you get trampled': TV chef Mike Van De Elzen
On the Money Talks podcast this week, Van De Elzen talks about growing up in Henderson, starting out in hospitality and the path that took him to the top of the chef game in London. It was a path that almost broke him. He got his big break in London in the early 2000s at a restaurant called Bank, which was 'the busiest, most-talked-about restaurant in London', he says. 'I wanted to work there because it was the hardest. And if you survive there, then you'll make it anywhere. So I started working there as a sous chef and made my way up to senior sous chef. I was in charge of 140 chefs.' Van De Elzen worked relentlessly day and night for a full year. 'It's so full-on. And you are surrounded by Gordon Ramsays, and you become Gordon yourself, because otherwise you get trampled upon.' 'I didn't see day. I didn't see night, I didn't see my wife. I worked for an entire year in this restaurant, and the only day it closed was Christmas Day.' That day off turned out to be the trigger for a complete breakdown. 'We went to a friend's place for Christmas lunch and he said: 'Hey Mike, can you just check the turkey in the oven?' 'I said 'No problem' and I went into the kitchen, opened up the oven. The turkey was completely raw.' 'Something just broke inside me. 'I felt really, I felt sick. I couldn't stand. My wife took me home and I slept for four days.' On the podcast, Van De Elzen talks about his return to New Zealand, setting up restaurants and breaking into TV. He shares his passion for educating young people about food and talks about his battle with cancer in 2018. Listen to the full episode to hear more from Money Talks is a podcast run by the NZ Herald. It isn't about personal finance and isn't about economics – it's just well-known New Zealanders talking about money and sharing some stories about the impact it's had on their lives and how it has shaped them. The series is hosted by Liam Dann, business editor-at-large for the Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003. Money Talks is available on iHeartRadio, Spotify, Apple Podcasts or wherever you get your podcasts.
Techday NZ
14 hours ago
- Techday NZ
Calls grow for KiwiSaver diversification as Bitcoin yields soar
New research indicates that a lack of diversification in KiwiSaver portfolios may be limiting retirement prospects for thousands of New Zealanders, prompting renewed calls for advisers to expand their knowledge of emerging asset classes. Analysis conducted by digital investment platform Swyftx shows that investing NZD $36,500 - equivalent to NZD $10 per day - in Bitcoin over the past ten years would today have grown to approximately NZD $2.8 million, representing a 76-fold return. In comparison, the same sum invested in an average balanced KiwiSaver fund would likely now be valued at NZD $65,000 to NZD $70,000. Jason Titman, Chartered Accountant and Chief Executive Officer of Swyftx, stated that the new data highlights the need for contemporary retirement planning strategies and enhanced adviser education, especially as pension funds worldwide begin to integrate digital assets into their long-term models. "Digital assets are now a mainstream component of diversified investment portfolios internationally, yet New Zealand advisers are lagging in both adoption and education. "If you'd invested just $10 per day in Bitcoin over the past 10 years, you'd have spent $36,500 and accumulated roughly 14.5 BTC. Today, that would be worth around $2.8 million, a 76x return. That kind of performance deserves consideration, even as a small part of a retirement portfolio." Titman contrasted the Bitcoin returns to the typical balanced KiwiSaver fund, which he said had returned around 6% to 7% per annum over the past decade. This would have turned a NZD $36,500 investment into approximately NZD $65,000 to NZD $70,000 today. Titman noted that digital asset adoption among high-net-worth families has been more rapid, suggesting this group recognises the potential benefits of digital assets as part of long-term investment strategies. "It's a clear example of the opportunity cost facing retirement savers when portfolios remain too narrow. "Diversification into digital assets, even at a small allocation, could dramatically shift long-term outcomes for many Kiwis," he says. Official figures from the Financial Markets Authority show that KiwiSaver balances rose by 19.3% in the last year, taking the average member balance to NZD $33,514. Despite this, only two of the existing KiwiSaver schemes currently offer any exposure to digital assets. Titman pointed to international trends, such as reported moves in the United States to broaden permitted 401(k) retirement plan investments to include digital assets, as evidence that the retirement market is evolving. While these changes have provoked mixed reactions within traditional finance circles, Titman feels they indicate a global reassessment of retirement fund structures and the returns expected by investors. "Regardless of political stance, what we're seeing globally is recognition that younger generations want more control, choice and exposure to higher-performing asset classes. The question is whether New Zealand's system will evolve fast enough to meet that demand," he says. He emphasised that the aim is not to take excessive risks with retirement savings, but to modernise portfolio construction. "We're not talking about putting someone's retirement on the line. We're talking about disciplined allocation, say 3% to 5%, to a high-growth, emerging asset class that has already demonstrated long-term return potential. It's about optimising performance, not taking unnecessary risk," he says. According to Titman, increased investment in digital assets could also have wider economic benefits, potentially supporting local market development, job creation, and expanding the tax base. "It's a sector that is expanding, and investor engagement with it is already occurring outside of traditional channels," says Titman. Swyftx's research also examined the effect of early and consistent exposure to digital assets for long-term savers. Titman believed that such allocations can have significant cumulative effects over decades. "If a young investor allocated just 5% of their KiwiSaver contributions into Bitcoin when they enter the workforce, the compounding impact over decades, particularly with historically high long-term returns, could significantly accelerate the path to retirement for some individuals. "While not all investors would become millionaires, the data suggests that financial outcomes could improve substantially when higher-growth assets are appropriately integrated," he says. Titman identified a significant need to upskill the adviser community on emerging assets and said Swyftx has developed a digital asset education platform for financial advisers, including portfolio construction guidance and international case studies. Swyftx's user data indicates that 72% of its more than 300,000 New Zealand clients on its Easy Crypto platform are aged between 25 and 45. This demographic is consistent with the core KiwiSaver participant group, and many are already investing in digital assets outside of KiwiSaver. With KiwiSaver entering its 17th year, Titman argued that a broader discussion is needed around modernising the system for future generations. "We know that the current financial education gap in New Zealand is significant, however, when advisers are equipped with evidence-based tools and global context, they're far more confident having conversations about diversification that includes digital assets. "Adoption from retail investors is already moving rapidly. Our research shows over 700,000 Kiwis or 14% are engaging with digital assets independently, which points to a need for the sector to catch up, particularly as more of these investors expect personalised, forward-thinking retirement advice. "Better-informed advisers are better placed to help their clients navigate emerging options. The role of the adviser is not to speculate, but to build robust, evidence-based portfolios that reflect clients' long-term goals," he says.
