New Zealanders’ dismal savings balances revealed
A concerning trend has emerged in New Zealand’s financial landscape: a significant portion of the population is holding minimal savings. Westpac data indicates that 36 percent of New Zealanders have less than $500 in savings, raising questions about economic resilience and future financial security.
Regional Disparities in Savings
The data reveals a stark contrast between regions. Canterbury and Otago demonstrate the highest savings rates, with 28 percent of Westpac customers contributing to monthly savings and a median balance of $4200. Notably, 32 percent of customers in these regions hold savings of $15,000 or more.
In contrast, Auckland and Northland lag behind, with only 20 percent of customers making regular savings contributions and a median balance of less than $1500. This disparity highlights the impact of regional economic factors and cost of living on savings habits.
Shifting Investment Strategies
Low interest rates on traditional savings accounts may be prompting New Zealanders to explore alternative investment options. Warren Ngan Woo, programme manager for financial wellbeing for Westpac NZ, noted that people are looking at “micro investment platforms” as a way to potentially grow their funds. He emphasized the importance of thorough research before investing.
Westpac is proactively addressing this issue by sending “nudge emails” to customers with funds in low-interest accounts, encouraging them to consider better options. Sarah Hearn, Westpac’s managing director of product, sustainability and marketing, stressed the importance of establishing good savings habits, even with small contributions.
Despite financial challenges, 81 percent of Westpac home loan customers also maintain a savings account, indicating a continued commitment to financial planning. Hearn acknowledged that high costs, particularly in Auckland, contribute to the difficulty of saving, but emphasized that small, consistent savings can have a significant long-term impact.
Ngan Woo suggested that the South Island’s stronger savings performance may reflect positive economic activity in the region. He also noted that Auckland has been impacted by business closures and restructures. He expressed optimism, encouraging people to start small and build lasting habits.
Frequently Asked Questions
What percentage of New Zealanders have less than $500 in savings?
36 percent of New Zealanders have less than $500 in savings, according to Westpac data.
Which regions have the highest median savings balances?
Canterbury and Otago have the highest median savings balance of $4200.
What is the median amount being saved each month?
The median amount being saved each month is $150.
As New Zealanders navigate a challenging economic environment, will increased awareness of savings disparities and exploration of alternative investment options lead to improved financial wellbeing?