You wouldn’t expect your local hardware store to tell customers what margin it makes on drill bits and circular saws but Finsec is calling on banks to do just that with mortgage rates.

Following today’s OCR cut of 50 basis points to a record low 2.5% the bank workers’ union has taken it upon itself to be the white knight for bank customers as well as employees.

The original table accompanying the story "Negative real interest rates sabotage savers" omitted the pension (NZ Superannuation) from the net income figures. A revised table includes the omitted figures, and we apologise for the errors.

Faced with massive wealth erosion for savers, New Zealand’s retirement commissioner has no advice other than go back to work and see a good financial adviser.

While good news for some, crashing interest rates combined with high inflation is creating negative returns for conscientious savers, hammering the sole income source (other than the government pension) of many of New Zealand’s 495,000 people aged over 65.

Cuts in interest rates are not all good news. Spare a thought for the country’s savers who have poured money into banks this year – particularly those wealthy or near retired people paying tax on their interest earnings.

And there are now more of them than previously.

With global share markets heading south like migrating godwit, many savers have reverted into bank accounts, long term deposits, and in the smarter cases, the “cash PIES’ which offer a slightly lower tax rate on returns.