By Susan Edmunds of RNZ

Beneficiaries and people on New Zealand Superannuation are experiencing faster increases in the cost of living, while the biggest spenders are getting some relief, new data shows.

Stats NZ has released data for the September quarter, which shows the average New Zealand household experienced a cost-of-living increase of 2.4% over the previous 12 months.

That is less than the 3% rate of inflation, because it includes a 15.4% drop in mortgage interest payments.

Mortgage interest payments were the main contributor to highest-spending households recording the lowest annual inflation, Stats NZ said.

Their annual inflation rate was 0.8%, compared with 3.9% for superannuitants, who are less likely to be paying mortgage interest. Beneficiaries had costs increasing 3.4% and the lowest-spending households had an increase in costs of 4%.

Rents increased 2.6% over the year to September. Rent makes up 29.5% of beneficiary household expenditure. This compares with 13.1% for the average household, and 5.1% for highest-spending households.

Council of Trade Unions policy director Craig Renney, a former adviser to then Finance Minister Grant Robertson, said it had historically been the case that people on the lowest incomes had the highest rates of cost-of-living increases.

That had changed after Covid when home loan rates increased sharply but now the situation had reversed. He said it was likely that the impact would continue to be felt in this way.

“Much of the challenges are in administered costs, rates, electricity, going to see the GP, which are rising faster than general inflation.”

But Satish Ranchhod, a senior economist at Westpac, said it was important to note that some of the lower-income people who were experiencing higher rates of inflation would be young people in the earlier stages of their careers, who had not yet reached a point where they could buy a house.

“It’s misleading to say they’re getting hit, they’re just at a different place in the lifecycle.”

But he said times were still tough for many households, including many lower-income earners.

People with mortgages had experienced a much bigger squeeze on their incomes. Photo / 123rf

He said people who had mortgages had experienced large increases in recent years and a much bigger squeeze on their incomes.

The relief they were experiencing was likely to continue as the impact of falling interest rates filtered through to more people, he said.

Other significant increases were an 11.3% increase in electricity on average and an 8.8% increase in rates.

How are cost increases felt?

Inflation experienced in the 12 months to the September 2025 quarter:

• All households 2.4%
• Beneficiaries 3.4%
• Māori 2.4%
• Superannuitants 3.9%
• Highest-expenditure household group 0.8%
• Lowest-expenditure household group 4%.

– RNZ