There are still benefits to signing children up for KiwiSaver, despite the removal of the $1000 kickstart, says ANZ’s general manager of wealth products and marketing Ana-Marie Lockyer.
ANZ is reporting 50% fewer new KiwiSaver sign-ups since the incentive was removed.
Lockyer said part of that reduction would be fewer people aged under 18 signing up.
Without the kickstart, parents who sign up their kids will need to regularly contribute money to cover the cost of administration fees on the account. Previously, many had signed up for the $1000 and left it alone in the account to grow over time.
Lockyer said it had been made clear that the target audience for KiwiSaver was working New Zealanders.
But there were still reasons that parents might choose to sign up their children before they started at a job.
“You might want to start saving for their first home and give them a certain amount of money that will allow them to purchase a home. It’s also a way to start conversations about savings with your kids.”
Regular statements on a KiwiSaver account were one tool parents could use to engage with their kids about money and boost their financial literacy.
She said the drop in new sign-ups was not surprising and had been consistent, week on week, since the announcement.
“You always expect once an announcement is made that there is a period of uncertainty.”
Lockyer said it was possible it could bounce back.
But she said the biggest problem as a result of the change was that people might lose confidence in the scheme.
ANZ research showed that KiwiSaver members’ biggest concern was the possibility of the scheme being tampered with. “They don’t want to see changes that are not well advised.”
ANZ’s survey showed 62% of people who have not joined KiwiSaver are less likely to because the kickstart is gone, 40% are less confident about the future of KiwiSaver and 52% are worried that the Government will make other changes.