Kiwis went into this lockdown with a bigger savings buffer compared with last year's March lockdown but 40 per cent still have less than $1000 in the bank, according to research based on 500,000 ASB customers.
Average cash balances were 60 per cent higher heading into the August level 4 lockdown compared with February last year.
But 40 per cent remain without a rainy day buffer - although that is down from 48 per cent last year.
Vittoria Shortt, ASB chief executive, said it was good news that people were in a better position heading into this lockdown.
"If there is any such thing as a silver lining from Covid when people are really focusing on how to be more resilient in these challenging times I think that is positive.
"We saw cash balances 60 per cent higher and that is quite significant. Obviously, it is two sides of the coin though because a lot of it is due to a decrease in spending."
Spending was down by 22 per cent in Auckland during September and 5 per cent across the rest of the country.
"While that is good for people who are trying to save it is not good for businesses and really not good for small businesses."
Shortt said ASB still had a lot of customers that did not have $1000 in savings. "That's our waterline for rainy day financial resilience - so there is still a lot of work to do but at least it is going in the right direction."
The research found young people - those aged 18 to 24 - were the biggest savers and had boosted their balances by 9 per cent during September compared with an average of 5 per cent across the board.
Shortt said older age-groups were the ones who had not been building up their balances as much. "That could be a lot of different things, particularly those who might be in retirement or close to retirement who may have already adjusted their spending habits."
She said a lot of people believed that young Kiwis were out spending their money in clubs and bars but she said interaction with this group by the bank had revealed they were quite careful.
"They are really worried they are going to be locked out of homeownership. And they are very conscious the steps they take now do have quite a big impact. It has really surprised me listening to these customers directly how thoughtful they are being about the way their spend their money. More thoughtful than I was at the same age."
Shortt said if this situation, as terrible as it may be, is a catalyst for helping with good savings habits then that may be a bit of a silver lining because there was research which showed good savings habits were five times more impactful than getting a promotion and more money.
"A lot of people who don't have good savings habits can continue to earn more and more and just spend more and more."
Shortt said after the first big lockdown last year there was quite a big rebound in spending but to a certain extent the savings habit had stuck because cash balances leading into this lockdown were 60 per cent higher.
"Even with that revenge spending people did mange to hold on to some of the gains they had made earlier on.
"Generally speaking we are seeing the right directional trend."
The bank had also been on a drive to help stop customers using unarranged overdrafts which incurred fees, too often.
"We sent a message to all the customers we could see who were continuously going into their overdraft - we explained why they were getting in there, what was happening and some suggestions for what to do differently and we had an almost 50 per cent response rate where they actually changed their behaviour."
Shortt said ASB was encouraging customers to save the $1000 by suggesting those who had a tendency to dip into savings hide their accounts online and by referring people to Money Talks for free financial mentoring.
KiwiSaver was also a good way to save, she said. So far it had not seen any rise in hardship withdrawals from KiwiSaver.
Small business a worry
Shortt said the bank was very focused on small business customers at the moment.
"We are not yet seeing that translate through to any significant concerns on the personal side of the business but it is small business we are keeping a super close eye on."
The bank was calling those customers to offer help.
"It is very clear they don't want more debt. What they want is guidance - what am I doing about the vaccinations, where do I legally stand? How do I help with mental wellbeing?"
Shortt said the bank had been hosting seminars using its specialists to support small businesses with tips and tools which were free for any small business - not just the bank's customers.
"Because that is what they really need - not to borrow money it's to borrow an expert."
So far he bank was not seeing small businesses loan defaults rise. "Not yet but I want to keep a very close eye on it. We have got businesses that are not trading at all. Zero revenue line. It is great the government has increased support but it is not a particularly happy place out there for small businesses at the moment."
Bank vaccinations certs required?
Asked if the bank would be requiring customers to show proof of a vaccination certification before entering a branch when New Zealand moves into the traffic light system Shortt said it had not made that decision yet.
"We are still finalising our work. We are basing it all on the proper risk assessment and understanding the views of our people and people generally."
She said the bank hoped to finalise that work soon.
It was also still working through whether vaccinations for staff would be mandatory.
Under government mandates announced this week any business requiring vaccine certificates for customers will also have to ensure its staff are vaccinated when the new traffic light system comes into force.