27 Feb 2012

No big household savings boost from KiwiSaver

7:26 am on 27 February 2012

New figures suggest KiwiSaver did not make a significant contribution to household savings in 2011, despite accounts swelling by $3.3 billion.

Michael Littlewood of Auckland University's Retirement Policy and Research Centre says $1 billion of the increase came from Government payments.

New Reserve Bank figures show investments in other funds fell $1.7 billion.

That leaves $700 million of new savings.

Mr Littlewood says KiwiSaver is simply shuffling money around rather than significantly boosting savings as it was set up to do.

However actuary Jonathan Eriksen says the amounts in KiwiSaver accounts suffered last year from poor market returns.

He says a rebound in markets should show KiwiSaver making a far more impressive contribution to higher savings in 2012.