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NZers with a Mortgage Even Keener on Compulsory KiwiSaver
19 May 2014
For Immediate
Release
New Zealanders with a
Mortgage Even Keener on Compulsory KiwiSaver
New Zealanders with a mortgage have even more enthusiasm for compulsory KiwiSaver than Kiwis generally, says Financial Services Council (FSC), CEO, Peter Neilson.
In a Sunday Star Times/Stuff opinion piece (D14, May 18, 2014) it is suggested that the statement “New Zealand does need a compulsory retirement savings scheme even if it means it takes longer for me to pay my mortgage off” might elicit a “whole different outcome” than the 70.7%, or 7 out of 10 adult New Zealanders shown to be supporting compulsory KiwiSaver, in the independent Horizon Research survey undertaken for the FSC in October 2013.
However, the 927 respondents in the survey with a mortgage on their own home, supported compulsory KiwiSaver by 72.6%. Of the 879 respondents aged between 18 and 64, with mortgages on their own home, 74% supported compulsion.
The issue for middle and lower income New Zealanders is not whether you save either for a house or a comfortable retirement, they know you have to save for both and many are doing so using KiwiSaver, Mr Neilson says.
“If you get to retirement without mortgage free accommodation, you probably won’t achieve an adequate retirement, living on NZ Super alone.
“KiwiSaver for most New Zealanders is the best way to save your first home deposit and later to save to achieve a comfortable retirement. That’s why more than 10,000 New Zealanders have already used KiwiSaver to save the deposit to purchase their first home.”
Investment in a home or rental property is strongly tax favoured, whereas KiwiSaver funds face punitive taxation in comparison.
“That’s why the FSC is campaigning for fair taxation of KiwiSaver funds. Paying off the mortgage or saving for retirement in KiwiSaver is a false choice, we need to do both and a fairer tax treatment for KiwiSaver funds would help both objectives,” Mr Neilson says.
“The FSC has not itself taken a position on whether KiwiSaver should be compulsory or stay voluntary but has commissioned research and polling to help New Zealanders, our politicians and their advisers to be better informed about the options available.”
Currently interest earned on KiwiSaver investments is taxed. The FSC has told MPs that reforms to reduce the world’s most punitive taxes on savings could drop contributions for someone on the average wage by $164,000 and the tax change boosts their nest egg by $288,000 over a 40 year working life.
| Q23. And 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 | All with mortgages on their own homes | 18-64 with mortgages on their own homes |
| It's a terrible idea and I'd oppose it | 6.9% | 5.9% | 6.4% |
| It's probably a good idea for New Zealand, but not for me and so I'd oppose it | 5.5% | 6.2% | 5.8% |
| It's a good idea and I'd support it, with some reservations | 29.6% | 27.0% | 28.0% |
| It's a good idea and I'd fully support it | 35.4% | 40.0% | 40.0% |
| I don't know but I'm leaning towards opposing it | 3.4% | 4.0% | 4.1% |
| I don't know but I'm leaning towards supporting it | 5.7% | 5.6% | 6.0% |
| I'm neutral at this stage | 8.4% | 7.9% | 6.4% |
| I really don't know | 5.1% | 3.3% | 3.3% |
| Total Support | 70.7% | 72.6% | 74.0% |
| Neutral | 8.4% | 7.9% | 6.4% |
| Total Oppose | 15.8% | 16.1% | 16.3% |
| Not sure | 5.3% | 0.0% | 2.1% |
| N (unweighted) | 2767 | 927 | 879 |
| Margin of error | ±1.9% | ±3.2% | ±3.3% |
Source:
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%.
ENDS
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