A widely shared graphic ranks New Zealand last among OECD nations for household savings. The picture is more complicated than the ranking suggests — and the long-term trend matters more than the snapshot.
A graphic circulating online showing New Zealand at the bottom of OECD household savings rates has been getting attention — but economists say the comparison deserves a closer look.
The Visual Capitalist graphic, based on OECD data, placed New Zealand at -1.3 percent net household savings rate — the lowest of any country measured, below South Africa (-1 percent) and Latvia (zero). Sweden topped the table at 16 percent.
What the number means
The net household savings rate measures how much of disposable income households are saving after spending. A negative rate means households are spending more than they earn — drawing down existing savings or borrowing to cover costs.
New Zealand's -1.3 percent figure comes from 2023, which Westpac chief economist Kelly Eckhold noted was particularly tough for household saving. The interest rate tightening cycle was peaking, inflation was eroding purchasing power, and many households were drawing on savings to cover everyday costs.
Westpac's own data shows the savings rate has improved markedly since that trough.
The long-term picture
Gareth Kiernan, chief forecaster at Infometrics, said New Zealand's low savings rate was a long-term structural issue rather than a new problem.
"Through the 90s and 2000s in particular, it was in negative territory, which means we were spending more than we were earning," he told RNZ.
KiwiSaver had helped — formal financial savings were higher than they would have been without it. But Kiernan noted a large proportion of New Zealand household "saving" has historically happened through property, not financial assets.
"If you're getting wealthier through asset appreciation in property, that's been all well and good at times over the last three decades given what house prices have done. But if they're not going to appreciate going forward and you always need someone else to sell to, that's not a great position to be in."
House prices relative to incomes remain high and affordability poor, Kiernan said — meaning the structural position hasn't fundamentally changed.
Why other countries save more
Policy settings play a role. Countries with stronger compulsory retirement savings systems — like Australia's superannuation — tend to show higher household savings rates because a portion of income is locked away before it can be spent.
New Zealand's universal Superannuation, while providing retirement income, doesn't accumulate assets in the same way. Kiernan noted that if the government is effectively saving for retirement on your behalf, households may feel less need to save independently — though he described this as an oversimplification.
Lifting KiwiSaver contribution rates over time would gradually lift the measured savings rate, Kiernan said, but it remains a slow-moving indicator.
What this means for individuals
The aggregate savings rate doesn't tell any one person what they should be doing. Individual circumstances — income, debt, home ownership status, stage of life — all shape what saving is possible and appropriate.
The OECD comparisons also reflect different accounting conventions across countries, which can make direct cross-country comparisons misleading. New Zealand's measurement may not capture all forms of household wealth, including property equity, in the same way as other countries.
For those wondering whether their own savings are adequate, the question isn't how New Zealand compares internationally — it's whether your savings and investment strategy aligns with your goals and circumstances. A licensed financial adviser can help with that assessment.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.