Consumers more cautious about credit, keen to save

New Zealanders have become more cautious about the use of credit and more likely to save after the global financial crisis, according to a survey by credit company Dun & Bradstreet.

Some 39 percent of people surveyed said they are more likely to save money in the next three months compared to the same time last year, while 28 percent are less likely and 32 percent are just as likely, according to its Consumer Credit Expectations quarterly survey.

Consumers have held the same level of savings intentions for three consecutive quarters, despite New Zealand's economic pick-up, and most say they do not plan to increase their access to credit in the next quarter despite low interest rates.

The survey suggests an attitude of credit caution and financial consolidation has become embedded among consumers after the global financial crisis, the credit company says.

"New Zealanders' focus on financial stability appears unlikely to shift in the short term," general manager of Dun & Bradstreet in New Zealand Lance Crooks says. "Despite the positive conditions and low interest rates, consumers appear reluctant to increase their use of credit and are instead maintaining the recent trend of saving money."

Mr Crooks says the reverberations from the global financial crisis are still in the minds of consumers and despite the relative strength of the local economy, New Zealanders appear to be waiting for a sustained and equivalent global performance before they set aside financial caution.

Some 29 percent of New Zealanders surveyed expect to have a lower level of household debt in the third quarter of the year, an increase from 23 percent a year earlier.

The survey's Consumer Financial Stress Index has fallen for five consecutive months as consumers benefit from a stronger financial position and an improving local economy.

"Consumers are not resorting to debt in the way they used to and the lessons from the global financial crisis means they are still more likely to be consolidating their finances, even though economic conditions are improving," says Stephen Koukoulas, economic adviser to Dun & Bradstreet.

"The cautious approach to debt from consumers is a welcome development as it points to a long-awaited and much needed change in attitudes to savings." 

New Zealand's government and the central bank would be pleased with these trends, which signal a structural change in the economy, he says.

The national survey, conducted from June 10-24, gauged the views of 908 people aged between 18 and 64.

(BusinessDesk)