Young New Zealanders improving financial skills, but gender gap remains

By earthnews
1 year Ago

Young New Zealanders improving financial skills, but gender gap remains

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The study was established in 2012 to track the evolving financial knowledge, attitudes and behaviours of 350 New Zealanders then aged 18-22.
Photo: RNZ / Rebekah Parsons-King

Younger New Zealanders are growing their financial knowledge and capabilities, but women remain behind their male counterparts according to a long-running study

The findings come from the third stage of a 20-year longitudinal study run by Massey’s Financial Education and Research Centre (Fin-Ed Centre), with the support of Westpac.

The study was established in 2012 to track the evolving financial knowledge, attitudes and behaviours of 350 New Zealanders then aged 18-22.

Five years on, the participants are now between the ages of 28-32, with 232 from the original cohort returning for the latest phase of the study.

Fin-Ed Centre director Dr Pushpa Wood said the results showed an overall improvement in financial literacy and a narrowing gender gap, though she was still concerned that fewer women felt confident in managing their finances compared to men.

“We’re concerned that women continue to lag behind men in terms of financial capability. Women live longer on average than men and tend to have lower KiwiSaver balances and fewer other investments, so it’s important they make a long-term plan for handling their finances and review it regularly as their circumstances change.”

Wood said the latest wave of data showed life experience had replaced parents as participants’ main source of information on personal finance, with parental influence dropping from 27 percent in 2017 to 26 percent.

The cohort had generally positive financial behaviours, with 95 percent having some form of insurance and 92 percent participating in KiwiSaver, Wood said.

“We’re seeing confidence in money management grow, with participants thinking more about their financial goals, moving from 51 percent in 2012 to 73 percent in 2022.

“The change in their life situations relating to their age is becoming apparent with home loans now being held by 55 percent of participants, compared to less than 1 percent at the beginning of this study.”

Participants reported being more proactive in seeking to improve their financial knowledge, with 67 percent feeling good about their money management abilities and 73 percent reporting they have spent time thinking about financial goals, credit cards and spending habits.

Only 5 percent of respondents said they had no form of insurance.

“Experiencing a pandemic has helped impart some key lessons on our participants, with many remarking how they have since learned the necessity of being financially prepared for an emergency and getting insight into their own spending habits during the lockdown period,” Wood said.

“It will be interesting to see how this continues to develop within the next five years.”