Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Retirement Saving Reaching Critical Point

Resistance to Retirement Saving Reaching Critical Point

More New Zealanders than ever before are resisting the need to save for their retirement, according to the annual Sovereign SaverPulse survey of savings and investment attitudes.

Only 52% of respondents have started saving for their retirement, signaling a five percent drop since last year’s survey. The number of respondents beginning retirement savings is among the lowest in the seven year history of the survey.

“The economy is up, but motivation down,” says Simon Swanson, Managing Director, Sovereign. “With the booming housing market and more buoyant economy people have more disposable income. But this survey reveals an alarming indifference toward saving as people choose to live for today, rather than save for their retirement.“

The survey also showed a 10 percent drop in the number of people who said they were trying to save as hard as they could, to just 54 percent. The majority of the people who hadn’t begun saving for retirement were under 30 years old. Respondents claimed they felt guilty about not saving for retirement, but that was not enough to encourage them to start. Their guilt appears to have influenced their motivation, with only 36% of respondents saying they contribute to a regular savings plan.

The Sovereign SaverPulse survey also showed that more than 40 percent of respondents found it difficult to decide on how to go about making saving and investment decisions.

“There is a proliferation of products in the market and people are increasingly confused about what to do,” said Mr Swanson. “They’ve got their family and friends, experts and the government all telling them different things. Their response is to do nothing.”

78 percent of people said they did not believe the government would provide them with an adequate retirement income, but at the same time, these people are not making plans on how to supplement their superannuation either. Of the 34 percent of people who do not currently contribute to a retirement savings plan, one in five say it’s because they “hadn’t got round to it”.

The survey does provide a strong indication of the solution people want. A clear majority (71 percent) are in favour of some form of compulsory savings scheme. In addition, 67 percent said that if offered, they would participate in an employer-based retirement scheme. The figure of people in favour of tax incentives to encourage savings remains high, at 84 percent.

“The survey delivers a clear message from the public,” says Mr Swanson. “They want compulsory schemes that remove the temptation to spend money, are simple to understand and operate, and provide a suitable type of investment strategy.”

“The government has just launched a scheme for state sector employees which addresses many of the issues raised in the survey. The survey suggests that the general public is looking for a similar solution for their retirement plans.”

Further Sovereign SaverPulse findings reveal: The majority of people sampled (73%) are confident they will have enough savings to support themselves in retirement Of the 69% of those sampled who own their home one third consider their home as part of their retirement savings 23% believe residential property investment gives the best return – more than double that of any other type of investment There is a rising trend in the number of people who use a financial planner and the figure is now just under 30% A relatively low proportion (32%) of people are at least very confident that the are making the right investment decisions The majority of respondents (72%) are not relying on an inheritance to provide them with an adequate retirement income

© Scoop Media

Business Headlines | Sci-Tech Headlines


Media Mega Merger: StuffMe Hearing Argues Over Moveable Feast

New Zealand's two largest news publishers are appealing against the Commerce Commission's rejection of the proposal to merge their operations. More>>


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>


Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>


Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>