The deepest recession in more than 30 years has failed to dent New Zealanders’ appetite for KiwiSaver, according to the latest update by the tax department.
Over the past six months, some 190,000 New Zealanders have signed up to the government-sponsored retirement scheme, taking total enrolments to more than 1.1 million.
The trend has mirrored that of ING New Zealand, the largest KiwiSaver provider, which has more than 253,000 members.
“While some people expected the trend for enrolments might suffer in the current climate, all the data from the last six months has been positive and consistent,” said David Boyle, head of KiwiSaver distribution at ING.
“We are now seeing increasing numbers of New Zealanders actively saving for their retirement and a much greater understanding that the earlier people start a good savings regime, the better off they will be when they come to retire.”
KiwiSaver was launched by the previous administration a little over two years ago and surpassed the target uptake of one million members by 2015.
The National-led government’s decision to cut the minimum contribution to 2% has been credited with helping sustain new membership enrolments.
Last month, the Australian and New Zealand governments agreed to superannuation portability, allowing the transfer of approved between the countries.
This could see a “considerable” amount of some $16.6 billion in superannuation accounts the Australian tax office can’t account for flow across the Tasman to New Zealand, according to Finance Minister Bill English.
An aging population is expected to place undue hardship on the New Zealand economy, and Reserve Bank Governor Alan Bollard told a business audience in July that increased national savings was “critical” to rebalancing the economy.
“Private savings plans will need to take account of these pressures in the future,” he said.
Boyle is pleased with the age group spread in the IRD’s latest data, with 32% of new members in the 18-34 years-old demographic, and 30% in the 35-54 bracket, and said it indicates people are saving for retirement from an earlier age.