NZers admit they should be saving more

Research showing many New Zealanders are not on track for retirement proves the need for advisers, ASB says.

Almost half of New Zealanders responding to the latest ASB KiwiSaver Survey thought they should be saving more than 10% of their income to fund their retirements but only 22% were doing so.

ASB head of KiwiSaver Aidan Vince said: “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.”

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.

Half said they would need $50,000 a year in 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,” Vince said.

“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."

ASB wealth economist Chris Tennent-Brown said the research showed the important role advisers had in understanding how much people needed to live on in retirement as well as planning an investment strategy to stay on track.

"Most people appear to not be on track, but aren’t getting advice from an adviser, which is disappointing. Around 8% of respondents say they received advice from a bank, and 7% from a financial planner – I had hoped that a lot more people would get advice from both sources."