90.7% of GrownUps Feeling Budget Strain from Increasing Living Costs

Increasing living costs are having a dramatic impact on Kiwis, according to a recent survey conducted by Heartland in partnership with GrownUps.

The results show 90.7% of question respondents are feeling strain on their budget due to increasing costs, such as council rates, groceries, petrol, insurance and more. The survey also reveals people would benefit from additional funds to cover the increasing costs, with 55.1% of respondents stating access to extra funds would be very or relatively beneficial.

Inflation and cost of living reach new highs

In the March 2022 quarter, annual inflation reached its highest level in 30 years (6.9%), while the annual cost of living increase is the highest recorded since 2008 (also 6.9%). Although savings rates are on the rise again after a few low years, they’ve not increased proportionally to the simultaneous cost of living increases, and neither have NZ Super payments.

A retired couple receives $1,424.44 total fortnightly (after tax) from NZ Super, yet data from the November 2021 New Zealand Retirement Expenditure Guidelines estimates a couple living in a major city would need $1,729.88 per fortnight for a ‘no frills’ lifestyle, or $2,940.52 per fortnight for a comfortable lifestyle.

That’s a fortnightly deficit of $305.44 for a ‘no frills’ lifestyle and $1,516.08 for a more comfortable lifestyle, highlighting the issue faced by those who are living off NZ Super alone. To combat this, many Kiwis are beginning to look into alternative ways to pay the bills while still living a comfortable retirement.

Covering day-to-day expenses

One increasingly common way for homeowning retirees to combat the rising cost of living is by taking out a reverse mortgage, a type of loan that allows people aged 60 and over to access some of the equity in their property without needing to sell and leave their home.

For those who are struggling with increasing living costs, the ‘regular advance’ drawdown option can provide a welcome source of additional income to complement NZ Super payments. Another option for those who simply want some extra security is the ‘cash reserve facility’ option, which effectively acts as a line of credit that can be drawn from when needed, with interest only charged on funds that are drawn down.

Heartland has helped over 20,000 customers across the country release equity from their homes to have more financial freedom in retirement. To find out more about whether a Heartland Reverse Mortgage could help you take the stress out of increased living costs, get in touch with their friendly team on 0800 488 740 or reverseinfo@heartland.co.nz to discuss your options.

Applications are subject to loan approval criteria. Heartland Bank Limited’s responsible lending criteria, fees and charges apply.