Source: FinCap
Latest financial mentoring statistics reflect cost of living pressures and the need for increased and ongoing sustainable funding for financial mentors.
FinCap today releases our fourth Voices report – an annual analysis of the circumstances faced by tens of thousands of households who are working with financial mentors to address debt issues.
The numbers are sober reading. A record of more than 30,654 cases in the FinCap run Client Voices system, a 57% increase from 2021. A 121% increase in total client debt over five years to almost a billion dollars. The median client was further behind, spending $107 for every $100 of income each week.
FinCap Chief Executive, Fleur Howard, reiterates and celebrates the significant contribution of financial mentors and the value of their support in their communities.
“Both financial mentors and the whānau they support continue to innovate to find a way through many pressures. However, dead ends are being hit and the status quo with financial mentoring funding isn’t sustainable.
“Difficult debt can have a long tail in people’s lives, so when we miss an opportunity to resolve an issue now, this limits their financial inclusion, challenges their physical and mental health, and puts a strain on their relationships.
“We urgently need a reset to the chronic underfunding of the financial mentoring sector so we can ensure this essential service is accessible and safe for mentors and clients in the coming years.”
The report recommends a $30.5 million per annum increase in steady funding for financial mentors. This is in addition to the current $19.5 of Ministry of Social Development funding, which has not increased despite the 57% rise in cases closed over five years.
Recommendations include a $5.5 million increase in government funding and the exploration of levies and voluntary ongoing contributions of $25m from KiwiSaver providers, banks, other lenders, other financial services, electricity providers and telecommunications providers. Industry contributions are proposed in recognition of financial mentors’ roles supporting people to stay included in the essential services markets they need access to.
“Since 2015 there has been a 1046% increase in KiwiSaver hardship withdrawals nationwide and on average financial mentors are spending 40% of their time helping KiwiSaver members to understand options before deciding whether to proceed with a withdrawal,” says Fleur Howard.
“Financial mentors need more funding to keep being there when this support is needed for better outcomes.”
The report also puts a spotlight on the urgent need to modernise our debt collection laws. Our results show 86% of financial mentors had seen debt collectors make demands for repayment that would prevent clients from affording essentials.
“The wild west we have now means a debt collector can coerce someone to sacrifice money from their food budget to service a questionable, historical claim of debt.
Technically, debt collectors can be challenged when doing this, but practically it is unlikely and almost always will be going completely unchallenged,” says Fleur Howard.
FinCap continues to recommend that the government amend legislation to create a licensing regime on debt collectors. This would mean regulators could monitor for unacceptable practices and could better hold debt collectors to account when they cross a line.
FinCap has also just submitted on the Fair Trading Amendment Bill, pointing to the need for clear consequences that prevent harassment and coercion of the increasing number of households who are unable to pay.
More effective debt collection regulation can minimise cumulative harm in years to come from the significant debts people are incurring now while trying to survive endless cost of living pressures.
A copy of this report is available here: FinCap Voices Report 2026
The accompanying Appendix can be found here: