KiwiSaver still lacks widespread engagement

1/2 Auckland, New Zealand • 17 July 2007

Strong awareness, but KiwiSaver still lacks widespread engagement

Despite a marked increase in the public’s awareness of KiwiSaver, the new government retirement savings initiative still doesn’t register a high level of engagement.

This is the main finding of the second in a series of nationwide surveys on KiwiSaver undertaken by New Zealand financial and superannuation specialist, ING. The on-line survey polled 600 New Zealanders aged between 18-64. In the first survey, conducted in May, only 62% of working-age New Zealanders were aware that a workplace savings scheme was to be launched in July – although almost two thirds were in favour of the concept.

Two weeks out from the launch, ING’s second survey showed a staggering 99% of those polled knew of KiwiSaver. But although the same two-thirds proportion were still “generally in favour”, only 46% confirmed they would take it up.

Meanwhile, confusion still reigns, with just one in eight of those polled (13%) saying they felt “very familiar with the ins and outs of KiwiSaver”.

The survey – split 54% female and 46% male – included those in four income bands covering less than $40,000 to more than $90,000 and four age bands, 18-29, 30-39, 40-49 and 50-64.

It also asked how ready New Zealanders were for retirement. These results were particularly revealing. While only 5% of those polled felt the current NZ Super payment will be enough for when they retire, almost 70% said they had “no savings strategy in place”.

Of those who were saving, 61% listed their home as part of their retirement savings. And one third reported they found their current financial situation “quite tough” – either struggling to make ends meet or having to budget very carefully. Two thirds of those polled owned their own home, 60% were tertiary qualified, 60% were also employees, and 25% employers or self-employed.

Looking to the future, more than 60% expect to be working until the age of 65 and over half said they would be seeking full-time or part-time work beyond that time. Around 68% also felt that the current age of super entitlement should be lifted.

Other key survey findings were: • Of the 46% who “expect to join KiwiSaver”, nearly two thirds will opt for the 4% contribution rather than 8% • More than two thirds (72%) will “do their own homework or ask around” before deciding on their KiwiSaver provider • 11% say they will opt for a default provider • Females and those nearing retirement age are the most likely to sign up.

Steven Giannoulis, ING’s General Manager Marketing and Investor Services, says the new survey “clearly shows that in the lead-up to the launch of KiwiSaver, a large number of New Zealanders were looking for as much information about the scheme as they could”.

Ends

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