New Zealanders don’t agree with claims that they don’t have a savings problem, the Financial Services Council says.
Michael Littlewood, co-director of the Univeristy of Auckland’s Retirement Policy Research Centre, said in an interview with Marcus Lush on Radio Live that New Zealand does not have a savings problem.
But the FSC said that most New Zealanders did not agree with him.
FSC chief executive Peter Nielson said 41% of adults felt they needed to be compelled to save.
A survey conducted for the FSC showed 70% of adults support making KiwiSaver compulsory.
Just 12% oppose a compulsory savings scheme, 3% lean towards opposing it and 8% are neutral.
Neilson said New Zealanders overwhelmingly thought they were not saving enough for retirement and would not be able to live comfortably on just the pension.
Most thought they needed twice the current $282 a week that the pension would provide. But only 6% were contributing 10% or more to KiwiSaver.
“It’s abundantly clear that Kiwis want to lift retirement incomes, are prepared to save to do that through a compulsory KiwiSaver scheme – and more than 1.3 million actually say they need to be forced to do that, because they know they won’t get around to doing it themselves, “ he said.
“If they are presented with a package of policies which mean they can gradually start contributions at 0.5% a year each from employer and employee per year until they reach the minimum required under KiwiSaver, investments being defaulted into balanced funds, instead of conservative, and fairer taxes on savings, then they’re huge fans of compulsory KiwiSaver.”
Nielson said: “Kiwis are not silly: they know that a long-term policy and long-term savings are needed to build their wealth. They simply don’t believe experts who say they are saving enough and they won’t have a problem in the future. Already large numbers of people trying to live on NZ Super alone are struggling, especially those who must pay market rents.”