Why New Zealand needs annuities

New Zealand’s Government should step in to the annuities market, says the co-director of the Retirement Policy and Research Centre, Susan St John.

She says there was a need for annuities, particularly for middle-income people. Lower income people could not afford them and wealthier people did not need to bother but middle-income people had a serious dilemma in making a lump sum last from retirement until they died. “It’s quite a big issue.”

The New Zealand market was small and relatively risky for providers. “The Government is going to have to get its hands on the market in some way and facilities on some basis the design, development and delivery of annuities.”

Annuities could be linked to aged care requirements.