INDEPENDENT NEWS

Kiwis know how much to save but think they aren't on track

Published: Tue 28 May 2019 08:34 AM
• A clear majority, some 58% of respondents think they need to save more for retirement
• 46% of people think they should save more than 10% of their income, but only 22% of people are doing so
• The KiwiSaver index rose 1% in Q1, 2019 from 22% to 23%
Almost half of New Zealanders responding to the latest ASB KiwiSaver Survey think they should be saving more than 10% of their income to fund their retirement but only 22% are actually saving this much according to the latest survey.
ASB head of KiwiSaver Aidan Vince says, “We have regularly asked if people are saving enough, and this survey as well as earlier findings show the majority of people don’t think they are on track. In the latest survey we asked some more specific questions in order to understand how people come up with their savings goals, and identify areas where people need some help,” says Vince.
The survey showed although just 22% of people were saving more than 10% of their income, 46% thought they should be saving this much. A further 16% and 18% respectively said they did not know how much they were saving, and how much they should be saving.
“It’s fantastic to see that 22% of respondents are saving more than 10% of their income. This is a really good amount to aim for, and it’s also pleasing to see that a significant number of people know this is a good target. However, there are a lot of people that are falling short of their desired rate of saving, and a clear challenge for the industry is to help people achieve their savings goals. The recent changes to KiwiSaver, which allow people to select higher contribution rates is a good start,” says Vince.
“The good news is, a lot of people could be saving more than they think they are – 30% of people said they were saving between 3% and 5% of their income, however if they are putting the minimum of 3% into KiwiSaver that automatically means they are saving closer to 6% with employer contributions,” says Vince.
Of those surveyed, 58% said they needed to save more for retirement, with 50% saying they thought they would need up to $50,000 per year of retirement. When respondents were asked how they came to their figure, 15% said they used online tools, while 14% based their views on advice from family and friends. A further 11% said they formed their own estimate, while the same proportion (11%) formed their opinion from information from media. Around 8% received advice from a bank, and 7% from a financial planner.
“While it’s good that some people have thought about this, a lot of the really solid advice and information that’s available appears to be untapped by the vast majority of investors in KiwiSaver,” says Vince.
“So the key message for these people that don’t know how much they’re saving or don’t know how much to save, is to call a KiwiSaver provider or talk to a financial adviser, because they can help with both of those questions. Discussing the latest KiwiSaver changes to see what rate suits you is a great place to start to see whether you are on track or could save more,” says Vince.
Research from the first quarter of 2019 showed the KiwiSaver index, measuring respondents’ knowledge and understanding of KiwiSaver, had risen marginally from 22% to 23%. Vince says although this confidence level bounced back slightly, it is still far too low.
“Weak sharemarkets over 2018 contributed to people feeling unconfident in how things like KiwiSaver work, in part because it can be alarming to see your KiwiSaver value decline. In contrast, when the sharemarkets are going well like they have been in 2019, and KiwiSaver values are on the rise, people seem to feel a bit more confident. But this is just part of investing; the big problem is the majority of people have a lot of uncertainty about retirement savings in general. So for both KiwiSavers, and KiwiSaver Scheme managers, there is still plenty of work to do in order to get everyones’ retirement savings on track,” says Vince.
@ASBBank @ASBMarkets www.asb.co.nz
ASB Bank
Helping you get one step ahead.
In 1847, ASB opened as the Auckland Savings Bank with the pledge: 'to serve the community; to grow and to help Kiwis grow'. And that is very much what ASB is about today.
ASB is a leading provider of integrated financial services in New Zealand including retail, business and rural banking, funds management and insurance.
ASB strives to consistently provide its customers with outstanding service and innovative financial solutions. They're dedicated to providing simple financial products that allow their customers to bank with them how and when they want.
We all have our own ways to measure progress, and our own stories about the things that matter to us. Whatever way you choose to measure progress, and whatever your goals, ASB is there to help you get one step ahead.
Contact ASB Bank
Website:

Next in Business, Science, and Tech

Post-lockdown Retail Card Spending Picks Up
By: Statistics New Zealand
Contact delivers for customers, employees and shareholders
By: Contact Energy
OceanaGold Announces Receipt Of WKP Mining Permit
By: OceanaGold
COVID-19 lockdown has widespread effects on labour market
By: Statistics New Zealand
New Research By NZ Post Shows Online Shopping Grew 105% In Alert Level 3
By: New Zealand Post
Westpac NZ Lowers Merchant Fees For Small Businesses
By: Westpac New Zealand
Ice-olation For Antarctica New Zealand
By: Antarctica New Zealand
July House Price Index illustrates market resilience
By: QV Valuations
Queenstown Rents Experience Biggest Drop In Seven Years
By: Trade Me Property
The Quiet Earth
By: Auckland University
James Shaw says Kiwibank, not ministers should decide on investors
By: RNZ
Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments
By: Financial Markets Authority
Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off
By: FIRST Union
Stronger Green Voice Needed Next Term To Stop More Mining On Or Under Conservation Land
By: Green Party
Unemployment Figures Don’t Tell The Full Story
By: New Zealand National Party
View as: DESKTOP | MOBILE © Scoop Media