RNZ's money correspondent Susan Edmunds answers your questions. Photo: RNZ
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My partner and I have been in Australia for a year. We are both 53 and are looking to stay a few years before returning home. Could you please tell me when we need to be back so our New Zealand pension is not affected if that is how it works?
There is a residency requirement to get NZ Super in New Zealand.
People who were born before 30 June, 1959 need to live in New Zealand for 10 years since they were 20, including five after 50, to be able to qualify. Younger people need to live here longer - anyone born after 1 July, 1977, needs to have lived here for 20 years.
But in your situation, your time in Australia may be able to be used to help you meet this test.
New Zealand and Australia have a Social Security Agreement that means that people who have lived in either country can use the residence in each of those to qualify.
Ministry of Social Development general manager international, disability and generational policy Harry Fenton said if someone relied on time spent in Australia to meet the residency requirements, they would not be able to qualify for NZ Super until they reach the age of entitlement for Australian Age Pension, which is age 67.
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I am wondering if it is risky to invest a lot of your money with one provider even if it is diversified across funds? With my example, I have my KiwiSaver with Simplicity, and I also hold an investment fund with them. I am thinking of moving more money across to Simplicity, but putting it into different investment funds. But I'm wondering if I should be diversifying my provider, as well as diversifying my investment fund?
Greg Bunkall, data director at Morningstar, said there isn't much point in a typical investor spreading their investments across different providers.
The funds you are investing in are already well diversified across businesses, sectors, different parts of the world and asset classes.
"In Simplicity's case, their high growth fund has over 1000 individual investments, highlighting its strong diversification. In all cases, however, investors should seek independent financial advice and have an expert plan out how their investments are aligned to their goals and objectives."
Ana-Marie Lockyer, chief executive at Pie Funds, said New Zealand's regulatory framework requires robust governance, independent custody and strong operational controls - so if what you're worried about is the provider failing, the risk is really low.
She said there could be benefits to having one provider, too. "Diversifying across asset classes and investment strategies is essential, but diversifying across providers is not typically necessary, provided the chosen manager has strong governance, independent oversight, and a well-designed investment process."
I would like to caution people against direct debit payments through their bank accounts. Once you set up a direct debit, the recipient has control of what they take from your account - for ever. You have to go through hoops to avoid this and still it seems they have a lifelong access to your account once a direct debit has been arranged.
The Banking Ombudsman has a guide on its website to direct debits.
It notes that a direct debit is not the same as an automatic payment, which is an instruction from you to your bank to make a regular payment of a fixed amount from your account to someone else's, either for a specified period or indefinitely.
"A direct debit allows the direct debit initiator to submit a specific amount to be debited from your account on each occasion. The amount can be different each time, and this is why some people find it a handy way to pay the likes of telephone and power bills, which vary from month to month."
It says you should be able to cancel the direct debit at any time.
"The bank must cancel the direct debit when you tell it to do so, but it will also ask you to notify the direct debit initiator. This is a precaution to prevent the initiator unintentionally continuing to send direct debit instructions to your bank.
"If you cancel a direct debit authority but keep using the initiator's services, you will have to pay in some other way. Direct debits are merely a method of collecting payments. Banks are not responsible for the underlying contract between you and the initiator."
Deputy banking ombudsman Sarah Parker said open banking should give customers more options, including full control of the timing of the payment.
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