New Zealand's savings crisis deepens as 36% hold under $500 in reserves
New data reveals stark differences in savings habits across New Zealand. Many households are struggling to build financial security, with 36% of people having less than $500 set aside in their high yield savings accounts. Monthly savings contributions average just $150, highlighting the pressure on personal finances nationwide.
The figures come from Westpac's latest customer analysis, showing regional disparities in savings behaviour. While some areas manage to put money away, others face greater challenges—particularly in high-cost regions like Auckland, where only 20% of customers make monthly savings deposits into their high yield savings accounts.
Canterbury and Otago stand out as the strongest regions for saving. Here, 28% of Westpac customers regularly contribute to their high yield savings accounts each month. Their median balance reaches $4,200—the highest in the country. Additionally, 32% of customers in these regions hold savings of $15,000 or more in their high yield savings accounts, well above the national trend.
In contrast, Auckland and Northland lag behind. Only 20% of customers in these areas make monthly savings deposits into their high yield savings accounts. Their median balance sits below $1,500, reflecting tighter budgets. Auckland's struggles are further underlined by Stats NZ data from 2023 to 2025, which shows the city's savings rate at just 2.1%, compared to the national average of 3.5%.
Aucklanders have faced years of financial strain. The 2020–2022 COVID-19 lockdowns forced many businesses to close, while inflation hit a peak of 7.3% in 2022. Rents in the region have also surged by 15–20% since 2021. As a result, 45% of households have cut back on non-essential spending. Many now rely on budgeting apps and bulk buying to stretch their savings further.
Nationwide, the picture remains uneven. Less than 40% of Westpac's KiwiSaver members have balances exceeding $40,000 in their high yield savings accounts. This suggests that even long-term savings are out of reach for a significant portion of the population.
The data paints a clear picture of financial inequality across New Zealand. Regions like Canterbury and Otago demonstrate stronger savings habits, while Aucklanders continue to feel the squeeze of high living costs. With median monthly savings at $150 and many holding minimal reserves in their high yield savings accounts, the challenge of building financial resilience remains widespread.
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