Indecision As Numbers Saving For Retirement Drop
18 June 2002
Sovereign Finds Increasing Indecision As Numbers Saving For Retirement Drop
Survey findings send strong message to future government
The number of New Zealanders saving for their retirement has dropped for the fourth consecutive quarter from a high of 62% a year ago, to just 54% in the latest Saver Pulse* Survey. This reinforces the downward trend that increasingly, fewer people are saving for their retirement.
Sovereign Financial Services says the latest Saver Pulse findings support the company’s view that the focus of the government’s proposed superannuation policy is not instilling confidence in the public.
Sovereign’s Head of Marketing, Vena Crawley believes that long term, people do not have confidence that the Government’s proposed plans for superannuation will adequately support them in retirement, and this is causing anxiety and indecision on how to save for themselves.
“The Saver Pulse findings support this, and show almost half the people surveyed are suffering from decision anxiety on how to save, so aren’t doing anything at all.
findings show that 48% of people not yet retired find it
difficult to decide where and how to save for their
retirement. Indecision is leading half these people to take
no advice at all, which only increases their anxiety about
“We advocate the need for private savings in New Zealand. While we agree the Government’s proposed three-tier superannuation policy is appropriate, it has too large a focus on public provision. This is clearly having a negative impact on private provisioning, and these latest findings reflect that.
In the first quarter 2002, one in four (24%) people in high-income households ($70K plus) are still not saving for their retirement. Of the people not saving at all, 38% are in the higher income households ($50K plus) and 41% are in the middle age groups (30-49).
“The results show almost one third of these people are aged 40 or more, just over a quarter work fulltime, and 45% earn more than $30,000 per annum. This is a concern as all New Zealanders should be encouraged to save for their retirement, to help secure their future,” says Mr Crawley.
“Whether this is done through tax incentives, or with more emphasis placed on workplace retirement schemes, steps toward a solution need to be made soon. The future government needs to put the focus firmly back on private savings, so that people don’t see the Cullen Fund as the sole solution for their retirement.”
The results also show that increasingly, the kiwi ‘Do It Yourself’ mentality is spreading to managing money too. Of those who do have savings (for retirement or otherwise), 56% take no advice on their savings or investments.
“It is therefore understandable that 48 percent of these people find it difficult to decide where and how to save for their retirement. There are a wide range of options people can consider, and the first step they could take to remedy this is to consult a qualified financial adviser.”
Of those who do take advice, 19 % turn to their bank, 18 % to an investment advisor or financial planner, and 7% use a combination of the two. However a higher number of people (74%) are satisfied with the advice they receive from their financial planners and investment advisors, than from their bank (68%).
The Internet is an increasingly popular medium for New Zealanders to make their investments, up 5% to 35% of those surveyed. More than a third of respondents said they would be happy to use the Internet to make investments if it was with a well-known company.
* SaverPulse survey from Research Solutions, interviews over 700 people per quarter, with a maximum statistical margin of error of +/- 4%.
Released on behalf of Sovereign, by Network Communications.