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KiwiSaver Popular But People Feel Unprepared For Retirement

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, March 18 NZPA - The economic events of the last two years have provided a reality check and left many New Zealanders feeling unprepared for retirement, according to a survey by Mercer.

By the same token, these events and the introduction of KiwiSaver have prompted more retirement planning.

Mercer's KiwiSaver Sentiment Study, undertaken in 2009, found that 44 percent of survey respondents participate in the KiwiSaver scheme. In 2007, prior to KiwiSaver's introduction only 27 percent participated in a workplace-based superannuation scheme.

Yet 49 percent felt that life in retirement would be less comfortable than it was today, up from 42 percent in 2007, when Mercer conducted its first study just prior to the scheme's introduction.

Martin Lewington, head of Mercer New Zealand said that while the introduction of KiwiSaver has seen more New Zealanders take control of funding their retirement, recent economic turmoil has heightened their uncertainty and left many feeling unprepared for retirement.

"It is encouraging to see more New Zealanders playing an active role in planning for their retirement. The rapid growth of the scheme since 2007 demonstrates New Zealanders have embraced KiwiSaver and will increasingly rely upon it in years to come," said Mr Lewington.

When asked how beneficial they thought KiwiSaver would be to funding their retirement, 89 percent felt it would be very or somewhat beneficial, a significant increase from the 70 percent who thought so just prior to its introduction.

The proportion who felt KiwiSaver would not be beneficial at all for retirement funding dropped, down from 21 percent to 7 percent.

"Mercer's research indicates the more you understand KiwiSaver and retirement planning, the more likely you are to see the scheme as an important retirement savings option. The challenge for providers and Government now, is to increase education and understanding among those with lower levels of understanding of KiwiSaver to continue this strong rate of uptake among working New Zealanders," said Mr Lewington.

Of those New Zealanders who have not joined KiwiSaver, one in four anticipates they will do so in the next 12 months. For those still unlikely to join a scheme, lack of affordability was the most common reason.

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