Younger people and families with children are struggling with spending and are most likely to take on debt in coming months, according to a Dun&Bradstreet survey.Many people continue to face financial difficulties despite the economic recovery, with t
Younger people and families with children are struggling with spending and are most likely to take on debt in coming months, according to a Dun&Bradstreet survey.
Many people continue to face financial difficulties despite the economic recovery, with three in 10 people expecting to use their credit card in coming months and 28 percent concerned about their Christmas expenditure.
Four in 10 young people expect to need to use their credit card to pay for unaffordable expenses during the March quarter, while 71 percent of families with five children expect they will be forced to use their credit card for otherwise unaffordable expenses. the Consumer Credit Expectations Survey found.
This is 45 percentage points higher than families with no dependents.
"The annual Christmas credit splurge traditionally results in a significant spike in consumers struggling with their finances in the new year," said John Scott, D&B New Zealand general manager.
Three in 10 18-34 year olds and 33 percent of those aged 35-49 are concerned about the amount of money spent over Christmas. This figure falls to 21 percent for those aged 50 and over.
About 38 percent of families with three children and 37 percent of those with five children are concerned about their Christmas spending. This compares to 24 percent for households without dependents.
Younger people are more likely to increase debt levels this quarter. Nineteen percent of New Zealanders aged 35-49 and 15 percent of those aged 18-34 have expect to increase debt. This compares to 13 percent of people aged 50 and over.
"Consumers that are turning to credit to try and make ends meet should be wary of applying for new credit," said Mr Scott.
New Zealanders were demonstrating significant intentions to spend in the March quarter, which was positive for the economic recovery.
"Positively, those with the greatest intent to spend are not the groups that are demonstrating signs of stress and they are indicating they will pay for their purchases with savings."
Twenty nine percent of those aged 50 and over intend to make a significant purchase this quarter and 83 percent of this group have indicated they will pay for their purchase using their savings.
A divergence in age groups was also noticeable in unemployment data released last week. Overall, the unemployment rate was 7.3 percent but for 15 to 24 year olds it was 18.4 percent.
