A new report is warning New Zealanders the “country’s social fabric is fraying on almost every measure”, amid growing isolation, financial stress and institutional distrust.

Findings from the Helen Clark Foundation’s second annual Social Cohesion in New Zealand report were “both frightening and hopeful”, economist and report co-author Shambeel Eaqub said.

“New Zealand still has strong foundations, but there are growing cracks in how people experience fairness, opportunity and connection,” Eaqub said.

“Financial stress is the dominant driver.”

Surveying nearly 3000 Kiwis, the annual report measures the “social glue” binding New Zealand society together and compares changes between years.

The latest report saw major shifts in social attitudes and beliefs over 2025; trust in the Government fell three points to 39%, belief in hard work dropped seven points to 45% and declining immigration sentiment mirrored global trends.

The report's co-author, economist Shambeel Eaqub, said financial stress is the biggest impediment to social cohesion. Photo / Smoke Photo & Video

The report deemed financial strain the most significant factor impeding social cohesion, with those struggling under the cost of living considerably less likely to feel connected, trust public institutions and engage with their communities.

Paired with rising loneliness and isolation, Eaqub said social participation is moving “away from traditional institutions and toward more oppositional or online forms of engagement”.

Drawing from the two years of survey data, the report categorised New Zealanders into three distinct social groups; the connected (30%), the ambivalent (41%) and the alienated (28%).

Eaqub described it as having “three different New Zealands living alongside each other”, with the connected group recording strong social cohesion indicators against the alienated group’s more extreme social disconnect.

“Financial stress, political allegiance, institutional distrust and social isolation are reinforcing each other, producing a population that is frustrated and disconnecting from the conventional institutions we rely on for collective decision-making.”

Growing isolation and institutional distrust were also chipping away at New Zealand's social glue, the report warned. Photo / Michael Craig

Despite the fragility, 80% of Kiwis surveyed felt a sense of national belonging and pride in the country’s way of life, similar to last year’s result.

Youth were also found to be the most aspirational age group, despite recording the worst social cohesion outcomes in the report.

The foundation is now asking politicians to consider how legislative power can be used to restore common ground and foster mutual understanding among fractured groups.

“Social cohesion isn’t a ‘nice-to-have’ – it’s what allows a country to make difficult decisions and navigate long-term challenges,” Eaqub said.

“It happens when communities have the support and conditions to solve problems together, manage differences, and care for each other over time.

“If we want a resilient, inclusive New Zealand, strengthening social cohesion is vital.”