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Saving Rates of New Zealanders: A Net Wealth Approach

Publication Details

  • Saving Rates of New Zealanders: A Net Wealth Approach
  • Published: 24 Dec 2009
  • Status: Current
  • Authors: Scobie, Grant M; Henderson, Katherine
  • JEL Classification: D18; D31; D91; E21
  • Hard copy: Available in Adobe PDF format only. HTML available on request from

Saving Rates of New Zealanders: A Net Wealth Approach

Published 24 Dec 2009

Authors: Grant M. Scobie and Katherine Henderson


Reliable estimates of actual household saving rates in New Zealand have proved elusive as existing sources of data have in the past given disparate estimates, making it difficult to reach a consensus of the real rate of household saving. For the first time in New Zealand, however, longitudinal data on the assets and liabilities of households at the unit record level are becoming available from Statistics New Zealand's multi-year national longitudinal Survey of Family Income and Employment (SoFIE).

In this paper we first update estimates from the Reserve Bank's aggregate data on the household sector (a stock approach) and those from Statistics New Zealand's national accounts (a flow approach). These continue to give widely different estimates of the overall household saving rate, although both were negative in 2008 and both below their long-run trend values.

We then present initial estimates derived from SoFIE by comparing individuals' net wealth in 2004 with that in 2006 and computing the implied real saving rate on an annual basis. This yielded an overall median estimate of 16%. This is virtually the same as the long-run average annual saving rate measured from the aggregate household balance sheet from RBNZ. Furthermore, the estimated saving rates between 2004 and 2006 for the whole household sector in total are almost identical using RBNZ and SoFIE data.

However, it must be stressed that median estimates should be complemented with a measure of dispersion. There is a strikingly wide distribution of saving rates. For example across many categories of individuals around 40% are estimated to have had a decline in net wealth, implying a negative rate of saving. Initial explorations into the reasons for this are undertaken in the paper, but as yet are not fully understood. Measurement errors in the data can account for some of the disparities but much remains for further research.

Finally we demonstrate that over the period 2004 to 2006, passive saving in the form of the revaluation of house prices constituted a major part of the total change in net wealth. After removing owner-occupied property as an asset, the median saving rate remained positive at 5%, close to the long run average rate from the aggregate RBNZ data after correcting for changes in house prices.

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1 Introduction

2 Measuring Savings

3 The Aggregate Picture

  • 3.1 Flow measures
  • 3.2 Stock measures
  • 3.3 Comparing flow and stock measures

4 Unit Record Data

  • 4.1 Survey methodology
  • 4.2 Selection of sample for analysis
  • 4.3 Assets and liabilities in SoFIE
  • 4.4 Adjusting for differences in the timing of valuations

5 Results

  • 5.1 Change in wealth by category
  • 5.2 Basic descriptive analysis of saving rates
  • 5.3 Breakdown of the change in real net wealth
  • 5.4 Saving rate dispersion
  • 5.5 Estimating the effect of housing on saving rates

6 Conclusions and Future Directions


Appendix A: Additional tables

Appendix B: Adjusting change in net wealth for changes in house prices

Appendix C: Effect of random shocks to wealth

twp09-04.pdf (735 KB) pp. i-iii,1–74


Norman Gemmell provided helpful guidance on indexing price effects.  John Upfold, Manager of the Data Lab at Statistics NZ facilitated access to the data.  The authors are grateful for comments received from Adolf Stroombergen, John Bryant and Melody Guy.


The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the authors. They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in these working papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

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