Credit reporting agency Centrix has released its June Credit Indicator, showing a 14% rise in the number of people experiencing financial hardship and struggling to pay their bills compared to a year ago.
Nearly half of these cases, 46%, stemmed from challenges in paying mortgages, representing a 19% increase compared to last year.
28% of hardship cases were linked to credit card debt, while 18% were associated with personal loan repayments.
“The age group most affected by financial hardship is those between 35 and 49 years old,” Centrix said.
Hardship started to increase in November 2022, and according to Centrix managing director Keith McLaughlin, this reflects a consistent upward trend.
Buy-now-pay-later arrears increased slightly to 9% compared to last year, and energy bill arrears are up by 5%.
Meanwhile, phone bill arrears have remained unchanged.
In May, 485,000 people were behind on their bills, an increase of 2,000 from April. 180,000 of them were over 30 days overdue, and 81,000 were more than 90 days past due.
In terms of location, Wairoa District in Hawke’s Bay recorded the highest percentage of people in arrears at 18.3%. Kawerau District in the Bay of Plenty ranked second with 18.07%.
Tasman has the lowest rate of people in arrears (8.22%). This was followed by Central Otago and Wellington City.
Company liquidations have also risen, up 27% from last year’s numbers.
Over the past 12 months, more than 750 building companies have gone into liquidation.
The sectors with the highest rates of business failures include residential construction, property development and management, hospitality, and road freight transport.