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Future-proofing KiwiSaver will boost uptake, Mercer study finds

New Index provides demographic breakdown on attitudes towards KiwiSaver

Mercer Wealth Solutions believes long-term investment by employers and government to support KiwiSaver will increase uptake and acceptance of the scheme among working New Zealanders.

New findings and analysis from Mercer’s KiwiSaver Sentiment Study reveals nearly half (47%) of respondents are positive about the scheme, but the remainder are uncertain or against it.

Mercer found Kiwis in the latter group were reluctant to join the scheme because they were concerned about the security of their retirement savings or that KiwiSaver would change under a new government.

Head of Mercer New Zealand, Mr Bernie O’Brien, said it was essential employers, government and industry monitored peoples’ attitudes and worked together to improve sentiment.

“Our findings show that while many people are positive about KiwiSaver, a sizeable number have reservations.  Business, government and the financial services industry need to watch public attitude carefully and champion KiwiSaver.  Mercer believes this approach will help establish confidence in the scheme and make it an attractive option for individuals,” Mr O’Brien said.

In response, Mercer launched its KiwiSaver Index today to track regularly over time the relationship between peoples’ knowledge, attitudes and behavioural intent towards KiwiSaver.

The KiwiSaver Index shows that working New Zealanders can be classified into one of four different ‘levels’ of affinity:

§         Embracing (account for 14% of survey respondents): These people consider KiwiSaver to be beneficial in helping fund retirement, rate it positively and intend to join in the near future if they haven’t already.  Typically people in this category are aged 55 plus.

§         Reserved (33%): Ambiguous in their support of the scheme.  This group (largely 45 to 54 years of age) see the value in saving for retirement.  However, they are somewhat reluctant to join with a concern that it may be too late for them to benefit from the scheme.  They have also witnessed similar schemes fail in the past.

§         Sceptical (31%): While not ‘anti’ KiwiSaver, this group claim they are not willing to open a KiwiSaver account anytime soon.  They tend to be young families, and feel the day-to-day costs of living prevent them from actively participating in the scheme.

§         Against (22%): This group is adamant in its opposition to KiwiSaver.  They don’t see the scheme as beneficial, and do not intend to open an account in the near future.  These people tend to be younger (age 25 to 44), in relationships but have no children.

Mr O’Brien said Mercer’s KiwiSaver Index was a unique, valuable and free resource for organisations, government and the community.

“We intend to publish a KiwiSaver Index each quarter at www.mercerwealthsolutions.co.nz.  This will provide both a snapshot and ongoing comparison of how well Kiwis understand, accept and are engaged with the scheme,” he said.

Mr O’Brien said that for example “if employers were required to match KiwiSaver contributions in the future, the scheme’s take up rate among working New Zealanders would very likely increase, along with the level of acceptance”.

“As well as this, almost half of respondents (46%) supported the idea of employers contributing four per cent to their savings, and said this would increase the likelihood of them opening an account in the next 12 months.  Also, the majority (78%) of those likely to join the scheme in the next 12 months felt positively about making a personal contribution of four per cent and thought it an achievable amount to set aside for savings,” he said.

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