Little evidence that Super Fund affecting savings plans

The latest AMP SuperWatch research shows little evidence that that people are putting off long-term saving because of the Government’s Superannuation Fund, says AMP Managing Director Ross Kent.

However, it continues to show that many people don’t have long-term savings plans despite wanting more than the state pension to live off when they retire.

In the SuperWatch survey respondents were asked about their attitude to saving in relation to the New Zealand Superannuation Fund. Ninety-five percent said they believed they still needed to save in addition to this for their own retirement.

“Despite anecdotal evidence that people aren’t encouraged to save because they believe the Government is saving for them, this is not borne out by our research.

“While most people (66 percent) think the government has some responsibility for providing retirement income, 68 percent acknowledge that they personally need to take the greatest responsibility.

“The research also shows that not only do 75 percent of respondents think current levels of New Zealand Superannuation would not be adequate to support them in their retirement, 67 percent aren’t confident of even getting that amount when they retire. Despite this, only 49 percent of respondents say they are saving specifically for their retirement.

“Increasing the level of private saving in New Zealand remains the key issue for anyone concerned with the long-term fiscal impact of an ageing population,” says Mr Kent.

“Success will be about turning savings intent into savings action, but there are no silver bullets as to how we lift New Zealanders’ low savings rates. Hammering people with the ‘save more’ message doesn’t work and tax changes aren’t the whole answer either.

“AMP strongly supports the new savings campaign approach launched recently through the Investment Savings and Insurance Association’s (ISI). This approach champions the development of a savings framework for New Zealand. The framework would give people certainty about what they can expect from the state, certainty that their savings are protected through good regulation, and a clear idea of what they need to save for big items throughout their lives, including the kind of lifestyle they want when they’re older.

“Critical to the campaign is its foundation of a partnership between politicians, employers, unions, the financial services industry, and the community. The partnership offers the chance to liberate the debate from the adversarial politics that has dominated for so long.

“No-one has all the answers, yet there is fervent agreement that without a constructive, multi-lateral conversation the issue will continue to stall,” said Mr Kent.

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