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KiwiSaver Non-contribution Could Cost New Zealanders Billions, Reports National Capital

A recent study by financial advisory firm National Capital reveals that approximately 703,000 New Zealanders not actively contributing to KiwiSaver could collectively miss out on nearly $114 billion by the time they retire. The firm's latest KiwiSaver report highlights a concerning trend of undercontribution, with the average saving rate dropping to 4.27% of income last year, below the recommended 6.3%.

This undercontribution is most significant among young New Zealanders aged 18-24, who stand to lose up to $312,004 by retirement. The report underscores the pressing need to address New Zealand's saving habits, particularly in light of the current cost of living crisis that compels many to prioritise immediate financial needs over long-term savings.

KiwiSaver members can use the KiwiSaver HealthCheck to check whether they contribute enough.

Clive Fernandes, Founder and Director of National Capital, emphasises the importance of this issue: "The potential shortfall in retirement savings highlights a critical need for a national discussion on making KiwiSaver compulsory. While there's notable support among the elderly and the youth, the middle-aged demographic remains hesitant due to immediate financial burdens. It's crucial we explore this avenue to secure the financial futures of all New Zealanders."

The debate on KiwiSaver's compulsion, as suggested by Fernandes, should involve key stakeholders, including the Retirement Commissioner and retirement experts, to present well-informed options to the government.

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In addition to savings trends, National Capital's report also evaluates various KiwiSaver funds, naming Booster Socially Responsible High Growth and Simplicity as top performers in their categories.

For more detailed insights, download the KiwiSaver Value for Money report.

National Capital is a financial advisory firm based in Auckland, New Zealand that provides personalised investment advice to its clients. Our mission is to help one million Kiwis become financially secure using technology and the principles of pūataata (transparency), tikanga (ethics) and taurikura (prosperity).

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