Worrying signs in latest superannuation research

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AMP’s latest superannuation research contains worrying signs that fewer people are saving for their retirement and more are expecting the Government to take prime responsibility for providing retirement income.

Wednesday, March 20th 2002, 2:31PM

AMP's latest superannuation research contains worrying signs that fewer people are saving for their retirement and more are expecting the Government to take prime responsibility for providing retirement income.

"Since the first SuperWatch survey in July 2000, the number of people saving for their retirement has fallen from 49% to 42%," says AMP's Head of Superannuation Strategy, Linda McCulloch.

"Alongside that, the number of people who think the Government should take the greatest responsibility for providing for them in retirement has increased from 20% to 27%, while the number who think they should take responsibility for themselves has fallen from 74% to 67%.

"Another notable trend is that more people are looking to others to take some responsibility for providing for them in retirement.

"Ninety-four percent of people still think they should take some responsibility for retirement provision, but the number looking to the government for help has jumped from 55% to 73%, and the number looking to families and the community for support has doubled to 12% and 7% respectively. Perhaps most significantly, the number who think their employer should take some responsibility for retirement provision has nearly doubled, from 17% in July 2000 to 31% in the latest results.

"We don't know yet what's behind the changes, but at a time when there's never been more publicity on the need to save for retirement income, it is worrying that people are becoming this complacent.

"Most people continue to believe Government Superannuation will not be enough to support them in retirement and their expectations about what they will be able to do in retirement are falling. Significantly less people now expect to have a debt free home, financially help family, buy a new car, and take part in recreation activities compared to July 2000," she says.

The SuperWatch results do not support the contention that people on lower incomes can't afford to save. While people earning more are more likely to be saving, 73% of people earning less than $50,000 are saving, whether it is to pay off their house, buy a new car, travel, retirement, setting up a business, or for education. Thirty two percent of people earning less than $50,000 are saving for their retirement, and 26% have a formal, long term superannuation plan.

"Tax incentives and employer schemes are identified as the preferred options in terms of what could be done to encourage people to save, or to save more, for their retirement. Nearly six out of 10 adult New Zealanders would like to see tax incentives on superannuation savings and would like their employer to provide a superannuation scheme. Five out of 10 would be encouraged to save if they didn't have to pay tax on their retirement savings until they retire," says Ms McCulloch.

Which one of the following are you currently saving for?
	Jul-00	Aug-01	Feb-02
Paying off your house	41%	38%	40%
A new car	13%	11%	12%
Travel or holidays	40%	36%	38%
Superannuation/retirement	49%	46%	42%
Setting up or investing in your own business	13%	12%	10%
Your own or your children’s education	32%	27%	27%
A deposit for a home purchase	14%	13%	13%
None	12%	15%	17%
Don’t know	-	1%	-
All Respondents	524	502	501

And which of these are your two most important priorities for saving?
	Jul-00	Aug-01	Feb-02
Paying off your house	62%	55%	57%
A new car	6%	4%	8%
Travel or holidays	27%	23%	22%
Superannuation/retirement	44%	38%	41%
Setting up or investing in your own business	9%	17%	15%
Your own or your children’s education	32%	35%	32%
A deposit for a home purchase	13%	15%	17%
None	-	-	1%
Don’t know	1%	1%	-
Saving for more than 1 or 2 things	175	146	143

Which of these are you currently doing to save for your retirement?
	Jul-00	Aug-01	Feb-02
Paying off a mortgage on your home	44%	37%	42%
Have a formal, long term superannuation plan	46%	40%	38%
Bank or term deposit investments	32%	28%	29%
Investing in shares	31%	27%	23%
Unit trust investments	17%	19%	15%
Investing in your own business	16%	17%	14%
Residential property other than your own home	17%	19%	15%
None / Don't Know	18%	23%	22%
All Respondents	524	502	501

If you were retiring today, would the current level of NZ Super be adequate to support you in your retirement?
	Jul-00	Aug-01	Feb-02
Yes	16%	21%	20%
No	82%	75%	77%
Don’t know/ no answer	2%	4%	3%
All Respondents	524	502	501

Are you confident that a similar level of government pension will be available for you when you retire?
	Jul-00	Aug-01	Feb-02
Yes	19%	19%	21%
No	72%	72%	69%
Don’t know/ no answer	9%	9%	10%
All Respondents	524	502	501

Which of the following would you expect to be able to do when you retire?
	Jul-00	Aug-01	Feb-02
Have a debt free home	91%	87%	87%
Financially assist family	67%	58%	58%
Buy a late model car	53%	48%	47%
Travel or holidays	79%	77%	77%
Recreation, e.g golf, bowls, fishing, arts, fitness	82%	80%	75%
Covering day to day basic living costs	91%	88%	90%
None	1%	0%	1%
Don’t know/no answer	1%	3%	0%
All respondents	524	502	501

Which of the following do you feel should take some responsibility to provide for you in your retirement?
	Jul-00	Aug-01	Feb-02
The government	55%	68%	73%
Yourself	92%	91%	94%
Your Family	6%	15%	12%
The Community	3%	8%	7%
Your Employer	17%	22%	31%
None	-	-	-
Don’t know/no answer	1%	1%	1%
All Respondents	524	502	501

And which of these should take the greatest responsibility?
	Jul-00	Aug-01	Feb-02
The government	20%	23%	27%
Yourself	74%	70%	67%
Your Family	-	1%	-
The Community	-	-	-
Your Employer	1%	1%	2%
None	1%	1%	1%
Don’t know/no answer	4%	4%	4%
All Respondents	524	502	501

The SuperWatch survey was conducted between December 2001 and February 2002 and has a sample size of 501. Margin of error is a maximum of +/- 4.4% at 95% confidence level.

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