Address to Future of Super Conference, Pullman Hotel, Auckland

Monday 14 October

Peter Neilson

CEO Financial Services Council

Embargo: For release after 9.15am Monday, October 14

For media release, backgrounder, presentations with visuals go to:

http://fsc.org.nz/SuperSizeRetirementIncome.html

How to make a comfortable retirement affordable for New Zealanders

When we talked to stakeholders and politicians there was little challenge to the analysis, but there was concern about whether putting aside 10% of your income was realistic for many New Zealanders, particularly for those on more modest incomes.

We know from the work we did last year that someone leaving New Zealand to go to Australia could more than double their income in retirement because of our neighbour’s Superannuation Guarantee scheme which makes saving compulsory.

Many people in KiwiSaver are not actively contributing and many of those who are saving, are saving only 6% of their income – it is not enough.

We know from the research that people get the idea that they have to save if they want more than NZ Super but they’re not saving nearly enough. It’s a bit like the gym membership though – you meant to go three times a week but somehow time slipped away and you’re lucky if you get there three times a month!

It is too big an ask for most people to save 10% of their annual income and it gets harder if you procrastinate. If you wait another 10 years you’ll need to save 15% of your income and on it goes and if you wait till you are 55 then you’ll need to save 50% of your income!

So we’ve done some work using New Zealand and international experts that shows there are ways to bring the annual KiwiSaver contribution rate down to 7% and make it affordable – and achievable - for New Zealanders by saving a little for a long time When we talked to stakeholders and politicians there was little challenge to the analysis, but there was concern about whether putting aside 10% of your income was realistic for many New Zealanders, particularly for those on more modest incomes.

We know from the work we did last year that someone leaving New Zealand to go to Australia could more than double their income in retirement because of our neighbour’s Superannuation Guarantee scheme which makes saving compulsory.

Many people in KiwiSaver are not actively contributing and many of those who are saving, are saving only 6% of their income – it is not enough.

We know from the research that people get the idea that they have to save if they want more than NZ Super but they’re not saving nearly enough. It’s a bit like the gym membership though – you meant to go three times a week but somehow time slipped away and you’re lucky if you get there three times a month!

It is too big an ask for most people to save 10% of their annual income and it gets harder if you procrastinate. If you wait another 10 years you’ll need to save 15% of your income and on it goes and if you wait till you are 55 then you’ll need to save 50% of your income!

So we’ve done some work using New Zealand and international experts that shows there are ways to bring the annual KiwiSaver contribution rate down to 7% and make it affordable – and achievable - for New Zealanders by saving a little for a long time

ENDS

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