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Need For Financial Literacy Advocated By Commissioner

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Fuseworks Media
Fuseworks Media

Wellington, April 27 NZPA - For Retirement Commissioner Diana Crossan the stories in the wake of finance company collapses are another lesson about the need for more education about finance.

Many people have said they did not understand the risks involved. The collapse of 18 finance companies has hurt investors.

"It is really sad that some people put their life savings in and some people thought they were diversified by being in several finance companies," she said.

The Commission launched a Draft National Strategy for Financial Literacy last November which brought together work in the area.

At a seminar in Washington next month, organised by the US Treasury and OECD, Ms Crossan will speak about the progress in improving financial literacy here and get a chance to compare it with other countries. She said New Zealand had made advances but things were still at an early stage. The introduction of KiwiSaver and other initiatives had produced a tipping point and the strategy was a way of pulling all the work being done on financial education together.

"We are not doing too badly," she said.

This week leaders from the Auckland finance and education sectors will workshop submissions made on the strategy.

She is hoping an advisory governance committee will be set up to regularly assess the strategy.

Ms Crossan is in regular contact with US, Canadian, Australian and UK officials working in the area of financial literacy.

She is hopeful there will be an attempt to lift everyone's game at the conference in Washington.

She still sees some issues in the national debate about savings that need addressing.

The difference between investment property and buying your own home had not been clarified in the debate about New Zealanders' over-investment in property.

"We want to separate those two in the debate because buying your own home is an important part of preparing for a good retirement in New Zealand".

The Commission has developed a major schools project and wants it embedded in the school curriculum and wants the Education Ministry to take the project over.

"Embedded means that it happens," she said.

The Commission does not tell people whether or not to take up KiwiSaver but it produces material to help people make a decision.

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