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What AMP's latest survey reveals

Too many New Zealanders looking forward to holidays, leisure activities and buying a late model car – on less than $32 a day.

Friday, October 19th 2001, 10:47AM
  • More than 9 out of 10 New Zealanders recognise the need to save for their own retirement.
  • But only half of them say they’re doing anything about it.
  • Three out of four New Zealanders say the current superannuation of $223/$339 per week* won’t be adequate to support them in their retirement. (* The current single living alone and married rate of NZS tax paid.)
  • Three out of four New Zealanders aren’t confident that when they retire, they’ll get a similar level of government pension to what’s available today.
  • Too many New Zealanders are not saving anything for retirement.

These are the key findings from the latest AMP SuperWatch survey of 502 New Zealanders completed over a six-month period in August 2001.

"What the latest SuperWatch research shows is that attitudes and behaviours have barely moved in the past year since the last survey took place. Too many New Zealanders are still thinking ‘she’ll be right’," says Linda McCulloch, Head of Superannuation Strategy for AMP.

She says that New Zealanders know they have to save over and above what the government might provide, but less than half are actually doing anything about it.

"What’s really interesting is, that when asked about the sorts of activities New Zealanders anticipate enjoying in retirement, many people expect to travel, pay for leisure activities, financially assist their families and buy a late model car.

"Hardly likely on the handful of dollars they’ll receive if New Zealand Superannuation is their only income in retirement.

"If these people aren’t saving now, then their biggest purchasing decision in retirement is likely to be whether they can afford new winter shoes – never mind the car or travel – on what may well be less than the current rate of around $32 a day ($48 a day for a married couple)."

Linda McCulloch says Superwatch shows that too many New Zealanders are not converting realisation to action.

"The inevitability is they’ll live for more than 20 years in retirement at just above poverty level, because New Zealand Superannuation is a safety-net pension, not a fund for holidays or cars.

"The challenge of retirement saving is not getting it onto the agendas of New Zealanders. It’s already there. The challenge is in stirring New Zealanders into action.

"We know that New Zealanders recognise the need to save. The challenge the Government now faces is to lead the way and create an environment in which we feel empowered to set aside savings for the future. Our own future and New Zealand’s future," says Linda McCulloch.

The OECD has identified the most effective model for superannuation as:

  • a safety-net age pension
  • provision for workplace saving
  • voluntary personal savings.

Linda McCulloch says the Government may have passed the Superannuation Bill and committed the funds, but that’s only part one of the equation.

"Now the Government needs to put a well-planned strategy together to encourage individuals to save, and to put it at the top of its list. "

Full Superwatch findings follow


SUPERWATCH 2001

August

July 2000 N=474, August 2001 N=502.

Which one of the following are you currently saving for?

  July 2000 August 2001
Paying off your house 42% 38%
A new car 14% 11%
Travel or holidays 39% 36%
Superannuation/retirement 49% 46%
Setting up or investing in your own business 14% 12%
Your own or your children’s education 32% 27%
A deposit for a home purchase 14% 13%
None 11% 15%
Don’t know - 1%
All Respondents (474) (502)

A significant change from 2000 to 2001 is fewer people currently saving for their own or their children’s education (significant at the 90% level).

And which of these are your two most important priorities for saving?

  July 2000 August 2001
Paying off your house 61% 55%
A new car 7% 4%
Travel or holidays 27% 23%
Superannuation/retirement 44% 38%
Setting up or investing in your own business 9% 17%
Your own or your children’s education 32% 35%
A deposit for a home purchase 12% 15%
None - -
Don’t know 1% 1%
Saving for more than 1 or 2 things (162) (146)

Currently, significantly more (at 95% level) are prioritising setting up their own business than 12 months ago. This appears to be across the board, no one group is significantly more likely to prioritise saving for starting up their own business.

Which of these are you currently doing to save for your retirement?

  July 2000 August 2001
Paying off a mortgage on your home 45% 37%
Have a formal, long term superannuation plan 47% 40%
Bank or term deposit investments 33% 28%
Investing in shares 31% 27%
Unit trust investments 17% 19%
Investing in your own business 17% 17%
Residential property other than your own home 18% 19%
None 17% 23%
All Respondents (474) (502)

Significant differences at the 95% level from 2000 to 2001 include fewer people paying of their mortgage in preparation for retirement, fewer having a formal superannuation plan and more currently doing nothing to save for their retirement. At the 90% level, fewer people are currently using bank or term investments for their retirement.

New Zealand Superannuation, that is the pension that is paid by the government in retirement, is currently $208 per week for a single person or $347 per week for a married couple after tax at the basic rate. If you were retiring today, would this be adequate to support you in your retirement?

  July 2000 August 2001
Yes 16% 21%
No 83% 75%
Don’t know/ no answer 2% 4%
All Respondents (474) (502)

A significantly higher proportion (at the 95% level) believe that the pension would be adequate to support them currently in comparison to 2000. This movement has been largely driven by a significant increase in people aged 18-49 years or females who believe it is adequate, along with slight increases in other groups such as males and 65+ year olds. Those aged 50-64 years were the only group slightly less likely to believe the pension is adequate.

Are you confident that a similar level of government pension will be available for you when you retire?

  July 2000 August 2001
Yes 17% 19%
No 74% 72%
Don’t know/ no answer 9% 9%
All Respondents (474) (502)

From 2000 to 2001, no change has been recorded in the confidence that a similar level of pension will be available on retirement. Almost three-quarters still believe it will not be available.

Which of the following would you expect to be able to do when you retire?

  July 2000 August 2001
Have a debt free home 91% 87%
Financially assist family 68% 58%
Buy a late model car 53% 48%
Travel or holidays 78% 77%
Recreation, e.g golf, bowls, fishing, arts, fitness 82% 80%
Covering day to day basic living costs 91% 88%
None - 0%
Don’t know/no answer 1% 3%
All respondents (474) (502)

Currently, people do not expect to be able to do as much on retirement as previously. At the 95% level, significantly fewer people expect to be able to have a debt free home (especially 18-34 year olds), and financially assist family (especially 50-64 year olds, females and those earning more than $50,000 per year). Slightly fewer also do not expect to be able to buy a late model car or cover day-to-day living costs.

Do you anticipate selling your family home and moving to a smaller home when you retire?

  July 2000 August 2001
Yes 50% 48%
No 38% 37%
Don’t know 13% 15%
All Respondents (474) (502)

Around half of the respondents will sell their family home in favour of a smaller house when they retire, while a just over third will not do so. This has remained unchanged from 2000 to 2001.

Do you expect to make a profit on the sale of your family home when you retire?

  July 2000 August 2001
Yes 83% 76%
No 13% 18%
Don’t know 4% 6%
Sell family home when retired (235) (241)

At the 95% level, there is a significant difference between the proportion who currently expect to make a profit on the sale of the family home compared to July last year, especially among 35-49 year olds or those aged 65 years+.

Do you expect to use the profit from the sale of your family home to help fund your retirement?

  July 2000 August 2001
Yes 81% 77%
No 19% 19%
Don’t know 1% 4%
Make a profit from selling family home (195) (183)

No significant differences

Which of the following do you feel should take some responsibility to provide for you in your retirement?

  July 2000 August 2001
The government 54% 68%
Yourself 92% 91%
Your Family 6% 15%
The Community 3% 8%
Your Employer 17% 22%
None - -
Don’t know/no answer 1% 1%
All Respondents (474) (502)

Overall there is a movement to the wider society taking some responsibility for providing in retirement. Currently, significantly more (at the 95% level) believe that the government, family, the community and employers should shoulder some of the responsibility in retirement when compared to July 2000.

And which of these should take the greatest responsibility?

  July 2000 August 2001
The government 19% 23%
Yourself 74% 70%
Your Family - 1%
The Community - -
Your Employer 1% 1%
None 1% 1%
Don’t know/no answer 4% 4%
All Respondents (474) (502)

While it is expected that the wider society take some responsibility, people still generally believe that the majority of responsibility lies with themselves in providing for retirement, and this has not shown a significant difference from July 2000.

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AMP Home Loans $200k+ 7.14 5.59 6.09 6.45
AMP Home Loans LVR <80% - - 5.75 6.09
ANZ 6.74 ▼6.09 ▼6.19 ▼6.39
ANZ Special - ▼5.59 5.75 ▼5.99
ASB Bank 6.75 5.99 6.19 6.39
ASB Bank Special - 5.70 5.75 5.99
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BNZ - Classic - 5.69 5.75 -
BNZ - GlobalPlus 6.74 5.89 6.19 ▼5.85
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BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.89 6.19 ▼5.85
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 6.05 6.20 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
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General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.65 5.69 5.74 5.99
HBS Special - 5.59 5.49 5.69
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.70 6.00 6.50 -
Housing NZ Corp 6.74 5.99 6.39 6.59
HSBC Premier 6.84 5.69 5.75 5.99
HSBC Premier LVR > 80% - - - -
HSBC Special - 5.39 - -
ICBC 6.75 5.99 6.39 -
Kiwibank 6.65 ▼5.69 6.19 ▼6.55
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.55 - - -
Kiwibank LVR > 80% - - 5.75 ▼5.89
Liberty - - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
Resimac 6.59 6.10 6.28 6.43
SBS Bank 6.65 5.69 5.74 5.99
SBS Bank Special - 5.59 5.49 5.69
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Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 5.99 6.19 6.39
Sovereign Special - 5.70 5.75 5.99
The Co-operative Bank 6.70 ▼5.69 5.75 ▼5.99
TSB Bank 6.74 5.95 6.19 6.30
TSB Special - - 5.79 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
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Last updated: 26 November 2014 3:38pm

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