New Zealanders’ assets - The Net Worth of New Zealanders – A report on their assets and debts, Statistics New Zealand and the Retirement Commission, August 2002

·        On average, individuals have $97,900 in net assets, and couples $322,300.   However, the median value of assets (the middle of the range) is $10,300 for individuals and $172,900 for couples. By comparison, the average wage is a little under $39,000 per annum.

·        The home accounts for 36% of the total value of the assets of New Zealanders. If other properties are added, the total rises to 45%.

·        Assets in superannuation schemes account for six percent of total assets. Life insurance policies add another two percent to that total. This compares with 15% in Canada and 11% in the USA.

·        Six percent of assets are held in bank deposits.

·        New Zealand has one of the lowest private savings rates of any OECD country.  New Zealand’s savings declined as a percentage of GDP from 3.8% in 1996 to 1.1% in 2000.  (OECD.)

 

New Zealander’s debt – The Net Worth of New Zealanders (as above)

·        80% of debts are by way of mortgage.  Next is bank overdrafts and the like at 10%, student loans at five percent and credit card debt at three.

·        Credit card debt is the most common form of personal debt, with about half of those surveyed having such debt.

·        This may understate the importance of credit card debt. The Reserve Bank estimates outstanding credit card balances at $3.6 billion at February 2003, compared with the household savings survey (HSS) estimate of $1.9 billion. Some of the difference will be the outstanding balances on business credit cards and some will reflect the growth of debt since the HSS survey.

 

Superannuation schemes - Report of the Government Actuary for the year ended 30 June 2002

·        In 1990, there were 333 employment based registered superannuation schemes covering 22.6% of the employed workforce. By 2001, the number of schemes had fallen to 263.  (Note: a number of stand-alone schemes have folded into master trusts).  However, coverage of the employed workforce has declined from 22.6% to 14.6%.

·        The decline in employer-sponsored schemes has been offset by an increase in the numbers in retail superannuation schemes. Membership of private sector employer and National Provident Fund schemes fell from 273,065 active members in 1990 to 218,284 in 2001. However, this fall was more than offset by a strong rise in the membership of retail superannuation schemes: up from 234,590 active members to 434,583. Balances in the retail schemes rose from a little under $1.5 billion in 1990 to nearly $8 billion in 2001.

·        The accumulated assets of all registered superannuation schemes are a little over $18 billion. The government pays out a little under $6 billion in NZ Superannuation benefits each year.

 

Views on savings – Sovereign Saver Pulse survey February 2003, AMP Attitudes to Saving research July 2002, ISI Colmar Brunton research March 2003.

·        No more New Zealanders are saving for their retirement now than five years ago, with 58% saving for their retirement in 1997 and 57% saving for their retirement now.  (Saver Pulse)

·        40% of people, not yet retired, with household incomes over $50,000 are not saving for their retirement. (Saver Pulse)

·        Attitude is the main driver of everything of savings behaviour, with income neither the motivator nor the key barrier to savings. (Attitudes to Saving)

·        Successful savers put money away before they see it.  Less successful savers try and find the money after they’ve paid for everything else. (Attitudes to Saving)

·        The reasons people don’t save include poor knowledge and planning skills, wanting things now, conflicting priorities, paying for children’s education, supporting their parents, and living beyond their means. (Attitudes to Saving)

·        People have no idea how much they need to save for their retirement.  If they do get some advice they’re overwhelmed by the magnitude of it. (Attitudes to Saving)

·        We believe we’re a nation of poor savers and this tends to become a self-fulfilling prophecy. (Attitudes to Saving)

·        People are aware of the need to save but find it hard to do so.  They are looking for a way of being able to save and still achieve their personal lifestyle goals (Colmar Brunton)

·        Still a belief that someone will look after us if we don't save (Colmar Brunton)

 

 

Other information

·        New Zealand has an ageing population.  It is estimated that the proportion of people over 65 will increase from 34% of the population in 2001 to 41percent in 2051.  (Statistics NZ)

·        The cost of NZ Superannuation, health care and education will rise as a%age of GDP.  NZ Superannuation is expected to increase from 4.7% in 2005 to 10.5% in 2045, and health is expected to increase from 6.3% in 2005 to 10.6% in 2045.  Education will grow more slowly, from 6.7 to 6.9% of GDP. Combined this is an increase from 17.7% to 28% of GDP.   (OECD)

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