KiwiSaver big part of retirement plan

Photo / Kenny Rodger

The economic events of the past two years have provided a reality check and left many New Zealanders feeling unprepared for retirement, according to a survey by Mercer.

By the same token, these events and the introduction of KiwiSaver have prompted more retirement planning.

Mercer's KiwiSaver Sentiment Study, undertaken in 2009, found that 44 per cent of survey respondents participate in the KiwiSaver scheme. In 2007, before KiwiSaver's introduction, only 27 per cent participated in a workplace-based superannuation scheme. Yet 49 per cent felt that life in retirement would be less comfortable than it was today, up from 42 per cent in 2007, when Mercer conducted its first study.

Martin Lewington, head of Mercer NZ, said that while the introduction of KiwiSaver had seen more people take control of funding their retirement, recent economic turmoil has heightened their uncertainty and left many feeling unprepared.

"It is encouraging to see more New Zealanders playing an active role in planning for their retirement. The rapid growth of the scheme since 2007 demonstrates New Zealanders have embraced KiwiSaver and will increasingly rely upon it in years to come," he said.

When asked how beneficial they thought KiwiSaver would be to funding their retirement, 89 per cent felt it would be very or somewhat beneficial, a significant increase from the 70 per cent who thought so just before its introduction.

The proportion who felt KiwiSaver would not be beneficial at all for retirement funding dropped, down from 21 per cent to 7 per cent.

Of those New Zealanders who have not joined KiwiSaver, one in four anticipates they will do so in the next 12 months. For those still unlikely to join a scheme, lack of affordability was the most common reason.

- NZPA