A budget advice expert says changing the eligibility age could penalise some savers. Photo / Getty Images
A budget advice expert says changing the eligibility age could penalise some savers. Photo / Getty Images
A budget advice expert says raising the superannuation age would hurt young people struggling to save for retirement while also battling high housing costs.
Meanwhile, Bay of Plenty locals have shared their views on the topic after experts butted heads about whether changes should be made to the pension, asreported in the Rotorua Daily Post Weekend.
The latest Stats NZ period life tables, which use deaths from 2019 to 2021 to calculate life expectancy, shows a newborn boy can expect to live, on average, 80.5 years and a newborn girl 84.1 years.
Distinguished Professor Emeritus Paul Spoonley earlier said superannuation would be a hot topic over the coming years.
He said people were living longer and in the near future between 20-30 per cent of New Zealand's population could be aged over 65.
"Over the next decade, because of the demography and ageing of New Zealand, the cost to superannuation will continue to rise significantly," Spoonley said.
Distinguished Professor Emeritus Paul Spoonley. Photo / NZME
Spoonley thought one option to help resolve the pressures of supporting the superannuation could be delaying eligibility.
Ministry of Social Development data showed the number of people receiving superannuation in the Bay of Plenty increased by 1803 between September 2020 and September 2021.
The most someone can currently get is $1013.28 per fortnight before tax if they live alone or with a dependent child. A couple where both partners meet the criteria receives $768.92 each per fortnight.
A spokesman for Minister for Social Development Carmel Sepuloni said there were no plans to change any eligibility rules for superannuation.
Retirement Commissioner Jane Wrightson said raising the age of eligibility in New Zealand would "increase inequity" for those with lower life expectancy rates, such as Māori and Pacific people, and those who are already heading into retirement financially worse off, particularly women.
Life expectancy for Māori was lower than for Europeans, Stats NZ data also revealed. European males could expect to live 81 years and females 84.5 years, compared to 73.4 for Māori males and 77.1 for Māori females.
Minister for Social Development Carmel Sepuloni. Photo / Mark Mitchell
Rotorua Budget Advice manager Pakanui Tuhara said many people are now working past the retirement age of 65 because they know superannuation won't allow them to enjoy the "quality of life they have come to expect."
Rotorua Budget Advisory Service manager Pakanui Tuhura. Photo / Stephen Parker
Tuhara didn't think people overlooked saving for retirement but many "simply can't afford" to put the money away given the rising cost of living and low wages.
"Over the past two years, the number of people coming in to receive help with a Kiwisaver hardship withdrawal application has increased dramatically and with the house price boom over the last six years, many who did take up Kiwisaver for saving for a house deposit have seen that option dwindle.
"Those that missed the window of opportunity are not only struggling for a deposit but know their return margin will be much lower."
Tuhara also thought raising the age of eligibility would have a negative impact on younger people.
"Now many [people] are working past the retirement age because they know that superannuation is not going to allow them to continue to live the quality of life they have come to expect," he said.
"That is another job that a younger unemployed person could be doing to create savings for themselves and their families.
"If you raise the eligibility age they will continue to work and reduce job opportunities for others, plus it reduces their period to enjoy their 'twilight years'."
Meanwhile, people interviewed in Mount Maunganui had mixed reactions to whether there should be eligibility changes to NZ Super.
Mikaere Tangoiro, who is aged in his 80s, realises the situation is a "knotty" one but thinks if people are "fit and healthy" over the eligibility age of 65, means-testing could be the answer.
"Some are fit and healthy after 65, so then maybe means test it, but that's a hard one for people who've worked hard and been thrifty all their lives."
Helene Nihotte, 22, thought on a similar wavelength: "If people are fit and healthy, why can't they work a little longer?"
A pensioner, who would not be named, thought means-testing would not be worth it.
"We were 65 [when we started collecting], but I think it could go up a bit. So many people are really well at 65…I don't know how you'd choose. I don't think it should be means-tested…because we worked all that time."
Meanwhile, Cathy, who would not provide her last name, thought 65 was dead on the money: "That's when you retire," the 57-year-old said.
Another anonymous pensioner thought the next generation was going to have "a hard time" but changing eligibility would lead to added stress.
"It's just a changing world, and this is another thing that will stress them more."
