New Zealand households cut spending as confidence falls

Experian has released a New Zealand spending report showing weaker household financial confidence and broader shifts in consumer behaviour. Only 38% of respondents said they felt optimistic about their household finances.

The findings point to continued pressure on household budgets. Among those surveyed, 67% said cashflow pressure had increased, and 69% said concerns about the economy had changed their financial behaviour.

Many households appear to be responding by cutting back, drawing on savings and relying more on credit. Two-thirds of respondents said their household savings had fallen, while 65% said they had reduced non-essential spending in response to rising expenses.

Almost half (45%) said they had dipped into savings to manage higher costs. A third said they had delayed major purchases to stay on top of household budgets.

Spending shifts

The biggest cuts in discretionary spending were on eating out, with 69% reporting they had reduced it. Takeaways and shopping or retail purchases followed at 64% each, while 39% said they had cut back on domestic travel and holidays.

Recurring costs are also under review. About 40% of respondents said they had reduced spending on subscriptions and digital services to contain expenses further.

Grocery bills were the main source of pressure. Some 41% of respondents said groceries were the expense that had increased the most over the past year, ahead of transport and fuel at 25%, utilities at 16% and housing costs at 9%.

The findings are based on a Pollfish survey of 366 New Zealand consumers, combined with aggregated and de-identified spending, credit and commercial insights data from Experian.

Credit pressure

The report also points to rising strain in household borrowing. More than a third of respondents (34%) said they found it stressful to keep up with repayments, while 33% said they had relied on credit to cover everyday or essential expenses.

The use of short-term payment tools also increased among some households. Around 18% said they had used credit cards or buy-now, pay-later products more often in response to rising expenses.

The pattern suggests that cost-of-living pressures are no longer confined to discretionary spending and are affecting how some consumers pay routine bills. The results also point to a divide between households trying to preserve savings and those already using borrowing to bridge gaps in monthly budgets.

"Consumers are becoming far more strategic in how they manage financial pressure. Rather than pulling back spending entirely, many households are reprioritising where money goes, favouring spending that offers greater value, flexibility or control over cashflow," said Barrett Hasseldine, Head of Data Science, Experian Australia & New Zealand.

The survey paints a picture of households making selective trade-offs rather than retreating across all categories at once. Dining, retail, and travel appear to be among the first areas to be trimmed, while groceries and fuel remain harder to avoid.

New Zealand consumers have faced persistent inflationary pressure on essentials in recent years, and the figures in Experian's report suggest the effects are still feeding through to sentiment. With fewer than four in 10 respondents expressing optimism about their finances, confidence remains subdued even as households adapt their spending habits.

For businesses in lending, retail and other consumer-facing sectors, the data offers another sign that customer behaviour is shifting under pressure. Changes in savings levels, repayment stress and reliance on flexible forms of credit may affect both demand patterns and repayment risk.

Hasseldine said, "This points to a more financially stretched consumer environment, where many households are juggling day-to-day commitments while trying to keep up with rising living costs. Credit and flexible payment options can play an important role in helping consumers manage timing gaps and maintain cash flow, but increased reliance can also be a signal that pressure is building. For lenders and consumer-facing organisations, the priority is understanding when customer circumstances are changing, so emerging pressure can be identified earlier and customers can be supported with more timely, informed and empathetic engagement."