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Don’t give up on KiwiSaver – ANZ
Don’t give up on KiwiSaver – ANZ
New Zealand’s biggest KiwiSaver provider, ANZ Investments, today urged the public to not give up on KiwiSaver because of the loss of the kick-start benefit for new members.
ANZ said new enrolments for the ANZ KiwiSaver Scheme had dropped by more than 50% since the Government announced an immediate end to the $1,000 KiwiSaver kick-start incentive in the Budget last month.
ANZ Wealth New Zealand managing director John Body said it would be extremely short-sighted for people to give up on KiwiSaver just because they didn’t get the $1000 kick-start incentive.
“KiwiSaver remains an excellent retirement savings vehicle, with a lot of benefits for members,” said Mr Body.
If you are working and contributing to KiwiSaver, your employer will likely match your contributions. Further, eligible members can still receive the government’s annual contribution of up to $521, provided they contribute $1042 during the year.
Mr Body said a 25-year-old, earning the median wage of $45,000 a year and contributing 3% of their salary, would receive $20,000 in Government contributions and another $74,000 from their employer by the time they reached 65.
“On the same basis, the $1,000 kick-start they originally received at 25 would have grown to just $3,000 by the time they’re 65 (adjusted for inflation). That’s less than 2% of their projected retirement balance of $202,000.”
Mr Body said the removal of kick-start had hit people’s confidence in the nation’s retirement savings scheme.
“In total, 62% of people who have not yet joined KiwiSaver say they are now less likely to join the scheme because of the scrapping of kick-start.” (Based on ANZ survey of 1200 people, conducted in early June 2015.)
The ANZ survey also found that around 40% of people were less confident about the future of KiwiSaver as a result of the change, with 52% of people saying they were concerned the Government would make other changes to KiwiSaver in the future that would affect their savings.
Mr Body said it was vital that any future changes to KiwiSaver were well-telegraphed so New Zealanders understood what was proposed and how it would affect them.
“More than 2.5 million New Zealanders have invested in KiwiSaver. It’s clear that any changes to the scheme are likely to make people uneasy.
“We need a no-surprises approach here so people don’t lose confidence in KiwiSaver because it’s important to the whole country that New Zealanders save for their retirements.”
ENDS
ANZ Bank New Zealand Limited
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