More savers but few have retirement plan: survey

The survey found most people believed the biggest barrier to saving more was not earning enough. Photo / NZ Herald

More people are saving and being cautious with their money now than at any time in the past four years, but fewer than one in five have a written financial plan that extends into retirement, a survey by AMP has found.

The AMP Super Watch six-monthly survey found three-quarters of people said they were saving for something, compared with 68 per cent in August last year.

Retirement savings is the top priority for savers, with KiwiSaver proving to be the most popular form.

The second priority for savings was for an emergency or rainy day which has shot up from 47 per cent to 56 per cent in the past six months.

Two-thirds of people now say they are being more careful about what they spend their money on and 76 per cent said they would rather save up to buy something now rather than purchase it on credit.

But only 6 per cent have prepared a written financial plan by themselves and a further 12 per cent say they have prepared a written plan with a financial adviser.

AMP head of marketing Blair Vernon said it was promising that more people were saving and signing up to KiwiSaver.

"The great challenge is that people are still stuck in tick-in-the-box mode when it comes to planning their retirement."

Vernon said the very act of signing up to KiwiSaver did not guarantee a person would have a secure retirement.

"Without a plan it's hard to see whether you are saving enough."

Vernon said the recent recession had encouraged people to be cautious about their spending but had not stopped them from spending.

The survey found most people believed the biggest barrier to saving more was not earning enough.

But Vernon said cutting back on discretionary spending was a better way to save in an environment where few were getting pay rises.

"People have to examine their spending," he said, although he admitted it was tough in an environment where people also felt they were being encouraged to spend more to help the economic recovery.

Vernon said despite the recession it appeared people were still taking a consumption approach to life.