2.4 Some basic results from the survey
This section presents some summary results from the HSS. Total net wealth as measured by the HSS has been grouped into four elements.
- Net Housing Wealth: based on the reported housing equity at the time of the survey.
- Net Financial Wealth: includes all property other than the primary residence, shares, trusts, farms, businesses, motor vehicles, cash, bank deposits and collectibles net of all liabilities (credit cards, bank loans, student loans, etc).
- Pension Wealth: the value of all pension schemes held at the time of the survey.
- Superannuation Wealth: the present value of the future stream of payments from New Zealand Superannuation (NZS) assuming that current levels of payments and eligibility criteria apply.
No allowance is included for human capital. Gibson and Scobie (2003) have shown that when human capital estimates are included in net wealth the level and pattern change significantly, with a very marked reduction in the inequality of the wealth distribution.
Table 1 provides a summary of the results for couples.[13] Several points are noteworthy. First, NZS represents a very significant part of retirement accumulation for all age groups. Second, housing equity only represents about one quarter of wealth excluding NZS, and 15 percent of overall mean wealth when NZS is included. Third, while these results are based on means, the distribution of wealth is skewed to the higher end. For example the top 20% of couples aged 45-55 hold over 40% of the total wealth of that age group. Because of this inequality in the distribution, it is useful to consider the median as well as the mean values. The overall median levels for couples across all age groups are shown in the last row of Table 1.
| Age Group |
Net Housing |
Net Financial |
Pension Wealth |
Superannuation |
Total Wealth |
|---|---|---|---|---|---|
| 25-34 | 32,263 | 81,930 | 13,546 | 233,692 | 361,431 |
| 35-44 | 73,130 | 176,055 | 19,918 | 259,935 | 529,038 |
| 45-55 | 109,456 | 267,043 | 31,973 | 290,039 | 698,511 |
| 56-64 | 127,506 | 292,028 | 46,298 | 323,766 | 789,597 |
| Total | 85,502 | 205,187 | 26,982 | 275,075 | 592,747 |
| Overall Median | 36,000 | 51,350 | 0 | 270,414 | 446,786 |
Note: A couple is assigned to an age group based on the age of the older partner at the time of the survey.
Table 2 provides estimates by quintile of current income. The fact that the median total wealth for the lowest three quintiles (ie 60%) is similar despite wide differences in the non-NZS components of wealth is indicative of the equalising effect of NZS. A major difference arises from the financial wealth of the highest 20% of the income distribution, resulting in significantly greater total median wealth for this group.
| Income Quintile |
Net Housing |
Net Financial |
Pension Wealth |
Superannuation |
Total Wealth |
|---|---|---|---|---|---|
| 1=poorest | 0 | 11,500 | 0 | 287,507 | 377,317 |
| 2 | 27,000 | 24,700 | 0 | 267,120 | 384,346 |
| 3 | 55,000 | 38,955 | 0 | 267,519 | 428,215 |
| 4 | 45,000 | 77,860 | 0 | 269,682 | 531,131 |
| 5=richest | 82,000 | 194,549 | 0 | 269,442 | 701,689 |
| Total | 36,000 | 51,350 | 0 | 270,414 | 446,786 |
Notes
- [13]A complete summary of current and projected retirement wealth for couples and unpartnered individuals is given in Appendix Tables 1 and 2.
