Young Kiwis miss out on ‘rock star economy’
New Zealand’s ‘‘rock star economy’’ of the past decade hasn’t helped everyone – and young people in particularly have been left behind, new data shows.
Since the end of the Global Financial Crisis, New Zealand has had strong economic growth, record sharemarket performance, growth in the housing market and low unemployment.
But Kiwi Wealth research, due to feature in its forthcoming State of the Investor Nation report, shows that not everyone has benefited.
It found 53 per cent of young adults, 53 per cent of low-income households and 64 per cent of renters said they were living from one pay cheque to the next.
Just over half the young adults said they were unable to save money.
Kiwi Wealth general manager of customer product and innovation Joe Bishop said significant numbers of people felt the decade of prosperity had passed them by.
‘‘How disenfranchising must it feel to be in that position, to hear people talk about how well the country is doing but it’s not reflecting through in your day-to-day life,’’ he said.
The past 10 years had been good for people who were invested in shares or owned a home, but not so good for anyone else.
‘‘For 55 per cent of young adults, growth is what happens to other people.’’
For people still trying to buy a first home, a decade of growth had left the goal further away, he said.
‘‘It’s logical that young people will generally have less wealth than older people who have had longer to accumulate money and assets.
‘‘But the worrying finding our survey has revealed is that young Kiwis today are disproportionately worse off. There’s an inherent wealth gap between young and old, and that gap is widening fast.’’
Survey results showed the growing wealth gap was especially pronounced for young people who rented their accommodation and who lived outside major urban centres.
‘‘This is a generation that mostly came of age during the 2007 Global Financial Crisis and struggled most through the recession that followed. They are faced with much higher costs of living and greater levels of debt than previous generations and, as a result, have limited or no capacity to save money and invest to create future wealth.
‘‘And wealth prospects seem bleakest in the regions. Young people in the provinces are twice as likely to be struggling financially compared to young Aucklanders.
‘‘That was a surprising finding, given how tough the Auckland market has been for some time for firsthome buyers, but shows that generally lower incomes in the regions are a very real problem.’’
Bishop said there was no easy solution. People who could afford to be in KiwiSaver should be, he said.
‘‘But for people who are living pay cheque to pay cheque, it’s difficult to see that deduction happening at source.
‘‘There is no silver bullet.’’