It’s good news for Bill English ahead of the May Budget announcement. As the Government seeks to make savings, RaboDirect’s latest survey shows New Zealanders are doing the same at home – with substantially more Kiwis saving now than 20 months ago. However, people are also missing out on better rates by not shopping around.
The poll shows 73 per cent of Kiwis now have cash savings, up from 47 per cent in a similar poll in August 2010. Reflecting the change in people’s savings habits, the poll also confirms just 11 per cent of Kiwis are not currently saving – a figure that has more than halved since 2010.
But while cash savings are on the increase, 69 per cent of New Zealanders either can’t be bothered shopping around between banks or are indifferent to hunting for the best savings rates.
“This research shows a profound shift in Kiwis’ attitude when it comes to savings, with more people now clearly seeing the value of putting money away” says Mel Templeton, General Manager for RaboDirect, New Zealand’s only online specialist savings bank.
“But while the message to save more and spend less has clearly got through, there are still too many people not looking around to check out what’s on offer. And with Reserve Bank figures showing Kiwi households have more than $80 billion in retail cash savings, there’s a lot of money that could potentially be working harder,” she says.
Earlier research in November 2011 also showed 50 per cent of New Zealand savers feel they’ve got money sitting in accounts that isn’t working as hard as it could be.
“It seems surprising that people wouldn’t consider their savings with the same amount of energy as when considering buying a car or a digital TV, but it’s hard to get that message across,” says Ms Templeton.
“To make the most of both time and money, people should be looking for consistently high interest rates that deliver value over time and aren’t eaten away by fees,” she says.
Ms Templeton says savers should also make the most of a competitive retail deposit market.
“In the current financial environment, there is intense competition among financial institutions to raise funds locally through retail deposits. It’s a great environment for savers who should be looking to maximise their savings by getting the best deals possible,” says Ms Templeton.
“Fortunately, there is some interest being shown in keeping an eye out for good rates. In fact 29 per cent of New Zealanders say they’re looking around more than they used to. I expect these people will benefit from this competitive retail deposit market.”
The survey also showed that cash savings have not seen the only increase. The share market and investment property market have also seen substantial increases. In 2010, four per cent of New Zealanders were investing in both shares and investment properties, whereas now 15 and 13 per cent of New Zealanders are investing in shares and investment property, respectively.