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

 


41% say “force me to save”

30 April 2014

For Immediate Release

New Zealanders reject claim they don’t have a retirement savings problem: 41% say “force me to save”

The public resoundingly disagree with one university expert’s opinion that New Zealand does not have a savings problem and don’t need compulsory KiwiSaver.

The Financial Services Council (FSC) says a co-director of the University of Auckland’s Retirement Policy Research Centre, Michael Littlewood, is “totally out of step” with the majority of New Zealanders when he said on radio today that “New Zealand does not have a savings problem”.

The FSC’s Chief Executive, Peter Nelson, says research conducted independently for it finds a staggering 41% of adults - equivalent to 1,384,000 New Zealanders 18+ - feel they need to be compelled to save.

The research, covering 3060 respondents nationwide in October last year, and released for the first time today, finds

70% support for making KiwiSaver compulsory:

65% support a compulsory savings scheme and 5% “lean toward” supporting it.

12% oppose a compulsory savings scheme and 3% “lean toward” opposing it.

8% are neutral – and could go either way.


Mr Neilson says Kiwis believe overwhelmingly that they are not saving enough for retirement and that they won’t be able to live comfortably on the NZ Super pension alone. The pension currently pays $282 for each of a couple after tax.

“New Zealanders on average believe they need twice NZ Super to live comfortably,” Mr Neilson says. “Yet our research finds only 6% are currently contributing 10% or more to their KiwiSaver accounts (the level required over 40 years to fund a comfortable retirement at 2 times NZ Super on current policy settings).

“It’s abundantly clear that Kiwis want to lift retirement incomes, are prepared to save to do that through a compulsory KiwiSaver scheme – and more than 1.3 million actually say they need to be forced to do that, because they know they won’t get around to doing it themselves,” Mr Neilson says.

“People know we have a savings problem – and survival on the pension alone is going to be an extremely long term affair without increased savings. Today’s job starters will face living more than 30 years after reaching age 65, compared with the 15-20 years of their grandparents.

“If they are presented with a package of policies which mean they can gradually start contributions (at 0.5% a year each from employer and employee per year until they reach the minimum required under KiwiSaver), investments being defaulted into balanced funds (instead of conservative) and fairer taxes on savings, then they’re huge fans of compulsory KiwiSaver.

“Kiwis are not silly: they know that a long-term policy and long-term savings are needed to build their wealth. They simply don’t believe experts who say they are saving enough and they won’t have a problem in the future. Already large numbers of people trying to live on NZ Super alone are struggling, especially those who must pay market rents.

The FSC’s members include most of the large KiwiSaver fund managers. The organisation, however, does not have a policy on compulsory or voluntary KiwiSaver. The FSC provides research and polling to enable political parties and the public to make up their minds on the issues but says the future of saving for a comfortable retirement income is one of the most important conversations the country needs to have.

Research results and notes:

October 2013, Horizon Research survey of 3,060 respondents nationwide aged 18+ Weighted to represent the adult population at the 2013 census. At a 95% confidence level the maximum margin of error is ±1.8%.

Need for extra retirement income:

• 8% of New Zealanders 18 years of age or over (but only 7% of 18-64 year olds) believe they could live comfortably in retirement on New Zealand Superannuation with no other income.

• 70% believe they could not do so.


Support for compulsory KiwiSaver:

• 70% support for making KiwiSaver compulsory:

• 65% support a compulsory savings scheme and 5% “lean toward” supporting it.

• 12% oppose a compulsory savings scheme and 3% “lean toward” opposing it.

• 8% are neutral – and could go either way.

Now that you have thought about it some more, what do you think of New Zealand making KiwiSaver compulsory, where all employees and employers have to contribute? ALL 18-64 years 65+ years
It's a terrible idea and I'd oppose it 6.9% 7.6% 3.5%
It's probably a good idea for New Zealand, but not for me and so I'd oppose it 5.5% 5.0% 8.2%
It's a good idea and I'd support it, with some reservations 29.7% 31.1% 23.1%
It's a good idea and I'd fully support it 35.2% 33.7% 44.2%


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news