PR: Government sends a strong signal on the need for Private Savings

The Investment Savings and Insurance Association support the Minister of Finance’s recent statement that New Zealanders should aspire to a retirement income that is better than that offered by New Zealand Super,” said Vance Arkinstall, chief executive of the ISI.

The message delivered by Dr Cullen to a Wellington superannuation conference is consistent with the research of ISI. In particular, that the country currently enjoys a window of opportunity in which to establish long term and sustainable savings policies. However, from approximately 2010 the effects of an ageing population begin to emerge and if nothing else is done New Zealand faces 3 stark choices:

- Reduce the level of NZ Super
- Introduce tight criteria – eg extend the age of eligibility
- Increase tax rates to cover the cost – this burden will fall largely on our children.

We are constantly reminded that New Zealand does not have a satisfactory private savings record and for the majority of New Zealanders, relying on New Zealand Superannuation will lead to a lower standard of living in retirement.