27 Jul 2021

Industry sector survey shows backing for mandatory KiwiSaver

6:46 pm on 27 July 2021

There appears to be overwhelming support to make KiwiSaver a mandatory saving scheme, according to an investment sector survey.

Kiwi dollar coins.

Photo: 123RF

A survey of 2000 adults by the Financial Services Council (FSC) shows overwhelmingly support to increase the role of KiwiSaver, with 78 percent supporting compulsion and 73 percent supporting an increase in contribution rates.

The Financial Services Council (FSC) represents investment and life insurance companies in New Zealand.

The research also found 64 percent were deeply worried about not having enough savings for their retirement.

"With the average KiwiSaver balance just over $25,000, there's a yawning gap between what New Zealanders have in their KiwiSaver and what they need to save," FSC chief executive Richard Klipin said.

"With 17 percent of New Zealanders not contributing to KiwiSaver at all and more than 30 percent contributing only the minimum 3 percent, there's no doubt that we need to do more to help New Zealanders build their KiwiSaver balances."

He said the survey also highlighted a need to improve the financial literacy of adults.

"A quarter of survey respondents didn't know how much they needed in retirement, and 22 percent didn't know the balance of their KiwiSaver."

However, more than 75 percent of respondents thought they were getting value for money for the KiwiSaver fees they paid.

Klipin said there was a need to open a discussion about KiwiSaver.

"Implementing changes as part of a phased approach would help ensure that vulnerable customers are not thrown in the deep end right away and have time to prepare for any significant changes to the KiwiSaver scheme.

"It's important to ensure those who most need it are building the savings they'll need for a comfortable retirement," he said.