Inflation dents retirement savings confidence

People can increase their saving or change their investment approach to help counter inflation, says ANZ. Pictured here are Paulette and Robert Barnes. Photo / APN

Adjusting peoples' retirement savings for inflation has dented the confidence of those putting a nest egg aside, an ANZ survey has found.

For the first time since the bank started its Retirement Savings Confidence Barometer ANZ factored inflation into people's savings targets.

The survey asks people how much in addition to New Zealand Superannuation they would like to live off in retirement and then tells them how much they will have to save to get there.

It then asks how confident they are of reaching that savings goal.

When inflation was included only 39 per cent said they were confident of reaching their savings' goals - down from 50 per cent in October when the last survey was undertaken.
John Body, ANZ wealth managing director, said the results showed many people had not factored inflation into their savings plans.

"If you've got more than 10 years before you retire, then you'll need to think about how inflation will impact the buying power of your savings."

For a 30 year old planning to have a retirement income of $200 per week on top of New Zealand Super the target would probably need to be double today's money when they reach 65, Body said.

"The change to our survey provides a more realistic financial target for the retirement lifestyle people want to have."

The change prompted 28 per cent of those saving to say they would increase their contributions to KiwiSaver.

A further 58 per cent said they would not change their plans despite seeing the impact of inflation but accepted they would need to save more.

Body said people could increase their saving or change their investment approach to help counter inflation.

The survey questioned 989 people aged between 15 and 64 in January and February.