Recent research from the Financial Services Council (FSC) has found that a significant portion of New Zealanders aged 18 to 25 are inclined to save additional income, with 62% indicating they would put extra funds or salary increases into savings. This suggests a conservative approach to managing personal finances among younger adults.
However, the same study reveals a downward trend in financial confidence within this group. Only 35% of respondents reported feeling confident in their financial decision-making, a drop from 42% the previous year. Just 13% described themselves as extremely confident in handling financial matters.
“This generation’s confidence in financial decision-making has declined from 42% in 2023 to 35%, with only 13% saying they are extremely confident in financial decision-making,” said FSC chief executive Kirk Hope.
He also noted that concerns about the cost of living are widespread, with 93% of those surveyed expressing worry about rising expenses. More than half said they would rely on friends or family for support if they faced unemployment.
The FSC report pointed to the importance of financial education and access to professional advice in building resilience among young adults.
“Learning about financial resilience and building confidence in financial decision-making can be addressed by encouraging young adults to reach out to professional financial advice and having financial literacy taught to them whilst at school,” Hope said.
Despite the willingness to seek guidance – 69% of respondents said they would consider professional financial advice – only 18% have actually done so.
The research also shows that 40% of 18 to 25 year olds contribute the default 3% to KiwiSaver, with half holding balances between $1,000 and $10,000. The most common reason for withdrawing from KiwiSaver is to purchase a first home.
When it comes to insurance, the FSC’s findings show that only about one in three young adults feel confident making insurance-related decisions. Health insurance coverage is reported at 37%, while less than a quarter have life insurance.
The FSC continues to advocate for the removal of Fringe Benefit Tax (FBT) on employer-provided health and life insurance, arguing that such a change could make these benefits more accessible to employees.
The council has stated its intention to continue discussions with government officials to promote policies that support greater engagement with KiwiSaver, expand access to insurance, and enhance the financial wellbeing of younger New Zealanders.
A separate FSC report, “Money & You: Valuing Belongings Over Ourselves,” released in July 2025, highlights a trend among New Zealanders to prioritise insuring property over personal risk.
The data shows that car insurance is held at twice the rate of life or health insurance, indicating a preference for protecting physical assets.
“The research shows New Zealanders instinctively protect their homes, cars, and possessions, but when it comes to insuring their most valuable asset, themselves, there’s a striking disconnect,” Hope said.
The report notes that most individuals with life or health insurance pay premiums themselves, with 78% of life insurance and 56% of health insurance policyholders funding their own cover. Cost is identified as a primary obstacle to broader insurance uptake.
“With cost being a barrier, expanding access to insurance through workplace schemes would boost uptake and improve coverage across the population,” Hope said.
The FSC has called for the removal of FBT on employer-provided insurance, suggesting that this would encourage more businesses to include insurance in employee benefit packages.
“FBT on employer-provided group insurance schemes discourages businesses, particularly small and medium-sized enterprises, from including insurance as an employee benefit,” Hope said.
