Are We Saving Enough?
10 March 2005
Are We Saving Enough?
Are New Zealanders saving enough? The answer depends on what is 'enough', and what New Zealanders are saving for.
The Retirement Commissioner Diana Crossan said today that more data was needed before this question could be answered confidently.
Ms Crossan was speaking at the first day of the Superfunds Summit 2005 in Auckland where the topic was Savings and Superannuation.
She said there were contradictory results and comments about savings rates coming from different data sources and this confused the public.
The New Zealand 2001 Household Saving Survey showed we were doing reasonably well at the average household level and the AXA Retirement Scope study of 9000 people in 15 countries also demonstrated that generally New Zealanders were not doing too badly in terms of savings, she said.
"While the material shows that there is not a massive under-saving for retirement in New Zealand, we know there are plenty of people out there who aren't saving enough and who need more tailored information to help them on their way."
"OECD data paints a different picture, but is measuring different, more aggregate savings".
Ms Crossan said monitoring future income and savings trends was vital to ensure the Retirement Commission, the financial sector and the Government were able to respond appropriately.
Trends to monitor included:
student loan debt
* Buying first homes late
* Current restricted access to workplace savings
* Increasing credit card debt and the lifestyles this enables (ie are they sustainable in the long-term?)
* Having children later
Ms Crossan said while these may not necessarily be problems, they do need monitoring and if required, policies adjusted.
Ms Crossan said it was hoped the gap in information on savings would be filled partially by Statistics of New Zealand's longitudinal survey, SoFIE (Survey of Family, Income and Employment).
The information gathered in SoFIE will help the Government and New Zealanders generally understand more about the factors (such as educational qualifications, family situation, sources of income, or age) which most strongly affect social and economic well-being over time.
"If we are talking about individuals' and couples' preparation for retirement (in terms of saving enough to replace their income) early indicators are that there may not be widespread under-saving for retirement. I stress these are early indicators. We haven't got the information to state categorically either way but SoFIE may give us more in the future", said Ms Crossan.
"So the jury is still out, we know that some people 'can save but aren't' and need a bit of a kick along."
"If we are talking about capital markets and attracting investment to New Zealand, I'll leave those comments to the economists and politicians," said Ms Crossan.