Attitudes to retirement alarming
23 March 2005
Attitudes to retirement alarming
Over three-quarters of New Zealanders believe that the current New Zealand Superannuation, or Government pension, won.t be enough to support them in retirement, but less than half are actually doing anything about it. That.s despite having big plans for their retirement, according to the latest AMP SuperWatch survey.
Overall, a total of 45% of those surveyed were saving for their retirement but when those same respondents were asked if they felt that the current pension in retirement of $245 per week after tax for a single person or $377 after tax for a married couple was enough, 76% said ,no. A further 62% also didn't believe that a similar level of pension would even be available for them when they retired.
Yet, in terms of what they expect to be able to do upon retirement, 85% want to have a debtfree home, 80% would like to take travel or holidays and 61% see themselves financially assisting their family. .These figures suggest to us that many Kiwis are living in a fantasy world,. says Roger Perry, General Manager Savings and Investments for AMP Financial Services. .We visualise our retirement one way but the reality is quite another as we.re not saving enough to achieve that vision. Basically, we need to get real.
Essentially, the items we are saving for are lifestyle items but those are exactly the items that will drop to the bottom of the list if we have limited funds in retirement.. From a regional perspective, the AMP SuperWatch survey also showed that Aucklanders are less likely to save for retirement than Kiwis living outside the country.s largest city with just 38% of respondents aged 18 and over saying they were saving for retirement at all. In comparison, 49% of Wellingtonians said they were saving for retirement.
Comparing the three main centres Auckland, Wellington and Christchurch, Christchurch citizens are more likely to be saving for their retirement than those in Auckland or Wellington, with 51% of Christchurch citizens saying they are compared to the 38% in Auckland and 49% in Wellington. They are also less likely than Aucklanders and Wellingtonians to expect to be travelling and taking holidays or buying late model cars into their retired years.
These figures would suggest that those from Christchurch, who may have been considered conservative by their North Island city counterparts, may be more realistic as well as more likely to do something now to reach their retirement goals for the future.
When they do save for retirement, 30% of Aucklanders save for superannuation using bank or term deposits, while only 20% of those outside Auckland employ that type of retirement 2 savings plan and instead use a formal long-term superannuation plan (68%). The survey also indicated that, outside of Auckland and Wellington, North Islanders were most likely to invest in their own business as a form of superannuation saving.
North Islanders and South Islanders also have a different perspective when it comes to retirement. For a start, when it comes to who should be responsible for their retirement, North Islanders are more likely to place some responsibility on their family (19% of North Islanders, compared to 9% of South Islanders), while South Islanders are more likely to place some responsibility with their employer (34% versus 25% in the North Island).
These figures could be explained by the fact that South Islanders are more likely to have a super scheme available in their place of work, with 30% of South Islanders saying that their workplace provides one compared to 26% of North Islanders, says Mr Perry.
The importance of work-place savings has also been recognised by the Government. They have already indicated that they will be announcing a range of initiatives for workplace savings schemes in the upcoming Budget..