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


Kiwis know how much to save but think they aren't on track

• A clear majority, some 58% of respondents think they need to save more for retirement

• 46% of people think they should save more than 10% of their income, but only 22% of people are doing so

• The KiwiSaver index rose 1% in Q1, 2019 from 22% to 23%

Almost half of New Zealanders responding to the latest ASB KiwiSaver Survey think they should be saving more than 10% of their income to fund their retirement but only 22% are actually saving this much according to the latest survey.

ASB head of KiwiSaver Aidan Vince says, “We have regularly asked if people are saving enough, and this survey as well as earlier findings show the majority of people don’t think they are on track. In the latest survey we asked some more specific questions in order to understand how people come up with their savings goals, and identify areas where people need some help,” says Vince.

The survey showed although just 22% of people were saving more than 10% of their income, 46% thought they should be saving this much. A further 16% and 18% respectively said they did not know how much they were saving, and how much they should be saving.

“It’s fantastic to see that 22% of respondents are saving more than 10% of their income. This is a really good amount to aim for, and it’s also pleasing to see that a significant number of people know this is a good target. However, there are a lot of people that are falling short of their desired rate of saving, and a clear challenge for the industry is to help people achieve their savings goals. The recent changes to KiwiSaver, which allow people to select higher contribution rates is a good start,” says Vince.

“The good news is, a lot of people could be saving more than they think they are – 30% of people said they were saving between 3% and 5% of their income, however if they are putting the minimum of 3% into KiwiSaver that automatically means they are saving closer to 6% with employer contributions,” says Vince.

Of those surveyed, 58% said they needed to save more for retirement, with 50% saying they thought they would need up to $50,000 per year of retirement. When respondents were asked how they came to their figure, 15% said they used online tools, while 14% based their views on advice from family and friends. A further 11% said they formed their own estimate, while the same proportion (11%) formed their opinion from information from media. Around 8% received advice from a bank, and 7% from a financial planner.

“While it’s good that some people have thought about this, a lot of the really solid advice and information that’s available appears to be untapped by the vast majority of investors in KiwiSaver,” says Vince.

“So the key message for these people that don’t know how much they’re saving or don’t know how much to save, is to call a KiwiSaver provider or talk to a financial adviser, because they can help with both of those questions. Discussing the latest KiwiSaver changes to see what rate suits you is a great place to start to see whether you are on track or could save more,” says Vince.

Research from the first quarter of 2019 showed the KiwiSaver index, measuring respondents’ knowledge and understanding of KiwiSaver, had risen marginally from 22% to 23%. Vince says although this confidence level bounced back slightly, it is still far too low.

“Weak sharemarkets over 2018 contributed to people feeling unconfident in how things like KiwiSaver work, in part because it can be alarming to see your KiwiSaver value decline. In contrast, when the sharemarkets are going well like they have been in 2019, and KiwiSaver values are on the rise, people seem to feel a bit more confident. But this is just part of investing; the big problem is the majority of people have a lot of uncertainty about retirement savings in general. So for both KiwiSavers, and KiwiSaver Scheme managers, there is still plenty of work to do in order to get everyones’ retirement savings on track,” says Vince.

@ASBBank @ASBMarkets

© Scoop Media

Business Headlines | Sci-Tech Headlines


Reserve Bank: Policy Lessons From A Year Of Covid-19

The Reserve Bank of New Zealand – Te Pūtea Matua was in a sound position to continue to meet its mandate in the face of the COVID-19 induced economic shock. However, we must continue to transform so as to remain relevant and effective in addressing longer-term challenges, Reserve Bank Governor Adrian Orr said... More>>

Transport Industry Association: Feb 2021 New Vehicle Registrations Strongest On Record

Motor Industry Association Chief Executive David Crawford says that the February 2021 figures are the strongest for the month of February ever. Registrations of 12,358 were 8.0% up on February 2020. Year to date the market is up 7.1% (1,735 units) compared to the first two months of 2020... More>>

Paymark: Lockdown Equals Slowdown For Some

The three days of lockdown for Auckland earlier this month made a clear impression on our retail spending figures. While only Auckland moved into Level 3 lockdown, the impact was felt across the country, albeit at different levels. Looking at the ... More>>

Infrastructure Commission: Te Waihanga Releases Report On Water Infrastructure

The New Zealand Infrastructure Commission, Te Waihanga’s latest discussion document highlights the importance of current reforms in the water sector. Its State of Play discussion document about water infrastructure is one of a series looking at the ... More>>

OECD: Annual Inflation Picks Up To 1.5% In January 2021 While Euro Area Records Sharp Increase To 0.9%

Annual inflation in the OECD area picked up to 1.5% in January 2021, compared with 1.2% in December 2020. Following a rebound between December and January, the annual decline in energy prices was less pronounced in January (minus 3.9%) than in December... More>>

Hemp Industries Association: Could The Next Team NZ Boat Be Made Entirely Of Hemp?

With The America’s Cup due to start in a few days’ time, innovators from a very different sphere have been wondering how long it could be before New Zealand could be competing in a boat entirely built from hemp, with the crew eating high-energy, nutritious hemp-infused foods and wearing high-performance hemp kit..? More>>

ACT: Matariki Almost A Half Billion Dollar Tax On Business

“Official advice to the Government says an extra public holiday at Matariki could cost almost $450 million,” ACT Leader David Seymour can reveal. “This is a perfect example of the Prime Minister doing what’s popular versus what’s responsible. ... More>>

Genesis: Assessing 6,000 GWh Of Renewable Generation Options For Development By 2025

Genesis is assessing 6,000 GWh of renewable generation options for development after starting a closed RFP process with 11 partners. Those invited to participate offer a range of technologies as Genesis continues to execute its Future-gen strategy to ... More>>