478,000 Kiwis Behind on Repayments as Financial Hardship Persists
New Zealand households are continuing to feel the pressure of rising living costs and tight financial conditions, with the latest Centrix Credit Indicator Report revealing that around 478,000 people – or 12.36% of those with active credit accounts – are now behind on their repayments. The July 2025 figures paint a sobering picture, showing that loan arrears and financial hardship remain stubbornly high.
Overall, consumer arrears, financial hardship cases, and late payments have plateaued at elevated levels, with no sign of significant recovery. Personal loan arrears currently sit at 9.3%, while hardship cases are up 7.1% compared to the same time last year, leaving nearly 14,450 accounts flagged as being in financial distress.
Consumer Debt Stagnates
While arrears had shown improvement earlier in the year, the report shows that this progress has mostly stalled. June’s figures of 12.36% in arrears remain virtually unchanged year-on-year, prompting concerns that any sustained reduction in arrears may have reached its limit - at least for now.
Hardship Cases Are On The Rise
Hardship claims continue to increase, with most cases linked to mortgages (45%), followed by credit card debt (29%) and personal loans (18%). This distribution underscores the multiple financial fronts on which New Zealanders are struggling.
Mortgage stress is particularly concerning, as it points to households under strain in meeting essential housing costs. Meanwhile, high levels of credit card hardship reflect the ongoing reliance on short-term borrowing to cover everyday expenses, while rising personal loan arrears show that longer-term financial commitments are also becoming unmanageable.
Tighter Lending Standards Evident in Personal Loans
Lenders appear to be tightening credit access: Centrix data now shows that nine in ten personal loans are issued to borrowers with a credit score of 505 or higher, up from 450 in early 2020. This shift points to more conservative lending practices underpinned by legislative and economic pressures.
Middle-Aged New Zealanders Hardest Hit
The age segment most affected by financial hardship is those aged 35 to 49 years - individuals often balancing mortgages, education costs, and daily living expenses. This demographic is showing the highest rates of financial distress, emphasising a continued struggle among family-age households.
A Persistent Challenge For Households
The July data reflects not just a momentary blip, but a broader challenge facing many Kiwi households. With arrears no longer declining and hardship cases rising steadily, the findings suggest that financial stress may remain a defining issue throughout 2025. Industry observers note that these figures should serve as a signal for policymakers, lenders, and community organisations to consider how best to support households in difficulty and prevent long-term economic harm.
How Debt Consolidation Loans Can Help
For borrowers juggling multiple debts, a debt consolidation loan can combine credit cards, personal loans, and other repayments into one manageable payment. This often reduces monthly outgoings, eases cash-flow pressure, and makes it simpler to stay on top of commitments by replacing several repayments with just one.
Loansmart is a New Zealand-based personal lender offering services such as debt consolidation loans and second‑chance lending. The company provides access to credit for borrowers with a range of credit histories, including those with imperfect records.