A deep dive looking into the financial capability of Pacific Peoples has highlighted the need for better financial education around money management and planning to help remove barriers to financial inclusion.
The study found that when Pacific Peoples have equitable access to financial knowledge and resources this can convert into greater financial wellbeing outcomes compared to non-Pacific Peoples.
Liline Hewett, Project Specialist – Pacific says, “This study reinforces the importance of building the financial capability and resilience of our Pacific Peoples to assist in supporting themselves and their families long-term.”
“It also highlights the need for further research into the financial capability of Pacific Peoples.”
Liline Hewett is responsible for the Sorted Pacific Peoples Pathways to Home Ownership programme. It is a free programme delivered online and provides Pacific People the tools to build financial capability. It is specifically designed for Pacific people, whatever stage of their financial journey they are on.
“We’ve had feedback from participants that they’ve gained skills to clear debt and have developed plans to build savings for them and their family's future, which has been encouraging,” says Liline.
The Pacific People’s deep dive analysis links to Te Ara Ahunga Ora Retirement Commission’s New Zealand Financial Capability Survey. The study builds a picture of New Zealander’s views on financial capability and makes the case for financial education which can improve financial wellbeing.
The results of the study have demonstrated that Pacific people continue to face barriers to achieving financial wellbeing, particularly in terms of low financial knowledge and confidence concerning money management. The findings also highlighted the impact Buy Now Pay Later schemes and car finance were having on people’s budget, exacerbating issues around spending against income and meeting commitments. 58% of Pacific people indicated they have at least one of these credit commitments, compared to 37% of non-Pacific people.
Key findings from the Deep Dive Pacific are -
- Pacific participants contribute to KiwiSaver in the similar numbers as non-Pacific, however for non-contributors 48% of Pacific women, who do not contribute, say they are stay at home parents.
- Pacific peoples are 50% less likely to have general insurance than non-Pacific making Pacific people vulnerable to health issues and car accidents.
- Pacific ethnicity is positively associated with active saving with 56% of respondents “saving for the unexpected” in comparison to 50% on non-Pacific.
- 58% of Pacific participants are more likely to run short of money for food or other regular expenses (in comparison to 36% of non-Pacific). The impact of this is reflected in an increase in Pacific people borrowing money to pay off debt.
- Pacific ethnicity is strongly associated with gifting and generosity, with 46% agreeing that they are generous when it comes to koha. However, this does have an impact with 32% also agreeing with the statement that they give money to others when they cannot afford to.
- Pacific ethnicity is positively associated with higher scores on questions around preparedness for retirement. This positive attitude, independent of other socio-economic factors, suggests that Pacific people may view both financial comfort and preparedness for retirement differently to non-Pacific people.
Further research is needed to better understand why Pacific people feel more positive about retirement. Understanding different expectations, how older people in Pacific culture are valued, and how income is converted into subjective well-being are all important questions that need to be answered. Answers will give a clearer picture of what retirement looks like for Pacific peoples.
In 2022, Te Ara Ahunga Ora is conducting the Review of Retirement Income Policies (RRIP) which occurs every three years. One of the questions the RRIP Terms of Reference addresses is the impact of government policy on the retirement savings outcomes and experiences of Māori as Treaty partners, and of Pacific Peoples and women.
Te Ara Ahunga Ora has also initiated a new study on housing for retirees that will form part of the RRIP. In partnership with the Ministry for Pacific Peoples, the research will include an in-depth analysis of retired Pacific peoples in intergenerational housing.
The results of the Deep Dive research, combined with the Intergenerational Housing study and RRIP will provide a detailed picture of Pacific people’s financial capability and where the gaps exist for policy and education. Targeted programmes such as the Sorted Pacific Peoples Pathways to Home Ownership have the ability to have a positive impact on Pacific communities in Aotearoa and build financial capability with long term benefits.
Notes to editors:
About the New Zealand Financial Capability Survey
A comprehensive New Zealand Financial Capability Survey to explore financial wellbeing. Alongside this substantial study three supplementary reports focus on priority audiences (women, Māori, and Pacific people). The three audiences are the focus for the National Strategy for Financial Capability.
The main survey involved 3027 adult New Zealanders and was conducted in early 2021. It measured a range of financial capabilities and outcomes using the financial wellbeing model designed by Prof. Elaine Kempson (2018). The framework for the model is derived from interviews and focus groups in several countries, and contains 21 components of financial capability which are each scored on a scale of 0 to 100.
About the Pacific People’s Pathways to Home Ownership
A new programme helping 1200 Pacific households on their journey to home ownership has been launched by Te Ara Ahunga Ora Retirement Commission.
The Ministry for Pacific Peoples funded Te Ara Ahunga Ora $2.64 million to develop the Sorted Pacific Peoples Pathways to Home Ownership programme in response to the growing housing needs of Pacific people in Aotearoa.
Te Ara Ahunga Ora has designed the programme and engaged Skills Update Training and Education Group to facilitate it over the next three years. Skills Update are experienced working with and alongside Pacific Peoples and practising cultural safety.
About the RRIP
Under the New Zealand Superannuation and Retirement Income Act 2001, the Retirement Commissioner is required to carry out a Review of Retirement Income Policies (RRIP) every three years. Key topics to be focused on for the 2022 review relate to three broad areas comprising New Zealand Superannuation, housing, and private savings including KiwiSaver.
More information, including the terms of reference, is available here.
For more information, or to arrange any interviews contact:
Elizabeth O’Halloran | Communications Specialist
Mob: +64 21 749 467