A new report shows short term financial strain is leading to a looming retirement savings crisis.<\/p>\n
The Financial Services Council’s latest research reveals households are facing the choice between relieving immediate financial pressures or saving for the future.<\/p>\n
Its latest Money & You research showed 94 percent of people are concerned about their finances as the cost of food, petrol, rent, rates and insurance hits households.<\/p>\n
Acting chief executive Haydee Stroud said people’s retirement savings are sitting on the back burner.<\/p>\n
“New Zealanders are having to make a trade off between the short term and the long term, often prioritising the short term just to get through paying heating bills or putting food on the table,” Haydee Stroud said.<\/p>\n
“Those choices are meaning that for many individuals the level of KiwiSaver savings are not where they need to be and they are not going to have enough for a dignified retirement.”<\/p>\n
The research report, Consumer Resilience and the Road to Prosperity examined why New Zealanders aren’t prepared for retirement.<\/p>\n
“Individual investment levels are falling short of what’s needed,” she said.<\/p>\n
The Financial Services Council (FSC) is calling for a review of KiwiSaver settings to future-proof the scheme and help New Zealanders in the long-term “no matter the economic climate.”<\/p>\n
“For retirees, one in five reported having less than a year’s worth of retirement savings to maintain their current lifestyle,” Haydee Stroud said.<\/p>\n
Lloyd Kavanagh, Partner at MinterEllisonRuddWatts, which partnered with the FSC on the research said they supported the council’s call for a comprehensive review of KiwiSaver to ensure the scheme is fit for the future.<\/p>\n
“Whether your concerns are about the short-term cost-of-living or long-term investment and retirement planning, we encourage you to talk with your wh\u0101nau, providers, or a registered financial adviser. It will help boost your financial confidence and wellbeing,” he said.<\/p>\n
All age groups reported a decline in their ability to access a month’s worth of income for emergencies.<\/p>\n
The report showed while some New Zealanders can cut back on non-essential purchases like takeaways and treats, others are confronting difficult decisions, such as whether to heat their homes (24%) or afford essential medications (16%).<\/p>\n
The FSC reported renters are less likely to manage through these tough conditions compared to homeowners.<\/p>\n
“The reality is stark: 94 percent of New Zealanders are concerned about their finances, and many are being forced to adjust their spending habits out of necessity,” Haydee Stroud said.<\/p>\n
Source: RNZ<\/p>\n","protected":false},"excerpt":{"rendered":"
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