Homeowners support compulsion: FSC

New Zealanders with a mortgage have even more enthusiasm for compulsory KiwiSaver than New Zealanders generally, says the Financial Services Council.

Wednesday, May 21st 2014, 3:47PM

It had been suggested that those with a home loan might be less likely to support a compulsory retirement savings scheme if it meant it took them longer to pay off their mortgages.

But FSC chief executive Peter Neilson said 72.6% of the respondents to a Horizon Research survey who had a mortgage supported compulsory KiwiSaver, compared to 70.7% generally.

He said the issue for middle and lower-income New Zealanders was not whether to save for a house or a comfortable retirement. “They know you have to save for both and many are doing so using KiwiSaver.”

He said: “If you get to retirement without mortgage free accommodation, you probably won’t achieve an adequate retirement, living on NZ Super alone. KiwiSaver for most New Zealanders is the best way to save your first-home deposit and later to save to achieve a comfortable retirement. That’s why more than 10,000 New Zealanders have already used KiwiSaver to save the deposit to purchase their first home.”

But he said investment in property was taxed more leniently than KiwiSaver investments.

“That’s why the FSC is campaigning for fair taxation of KiwiSaver funds. Paying off the mortgage or saving for retirement in KiwiSaver is a false choice, we need to do both and a fairer tax treatment for KiwiSaver funds would help both objectives,” he said.

“The FSC has not itself taken a position on whether KiwiSaver should be compulsory or stay voluntary but has commissioned research and polling to help New Zealanders, our politicians and their advisers to be better informed about the options available.”

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