tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Budget Briefing Friday - click here for details Dismiss
Last Article Uploaded: Thursday, May 30th, 6:45PM

Investments

rss
Latest Headlines

KiwiSaver could better serve low-income earners: AMP

Financial advisers play an important role in helping people on lower incomes navigate retirement savings, AMP’s general manager in New Zealand says.

Wednesday, June 28th 2017, 6:00AM 1 Comment

by Susan Edmunds

Blair Vernon said KiwiSaver could be improved to better cater for those who were not high earners.

He said he regularly spoke to people earning about $50,000 or less a year, who were facing enough of a financial challenge that it was not feasible to save for retirement. 

He said, while it was easy for the financial services sector to say that it should be possible for everyone to save 3% of their incomes, in some cases that was a significant amount and not the right decision to make.

Vernon said it was worth considering whether those earners should be given the option of saving 1% or 2% of their income, too.

“We need to be realistic about that.”

He said thought should also be given to whether the member tax credit should be reduced for higher-income earners, to allow more of that incentive money to be given to low-income KiwiSaver members.  Each KiwiSaver member can receive up to $521 a year from the Government if they contribute $1,042. The Government used to match it dollar-for-dollar.

"The changes made to water down the member tax credit have a much bigger impact on people with that level of earning," Vernon said.

He said sharing out the incentives in favour of low-income earners would make KiwiSaver more compelling for those earning less and would have an impact on their long-term outcomes.

It would probably be missed less by those earning more, he said.

"If you’re earning more than $2,000 a week and you didn’t get that $521 form the Government but you knew it was going to someone on a more moderate income, would that be a tragedy?"

He said there was also a challenge among middle-income earners who could afford to save but chose not to because they prioritised other spending. "They're making a conscious choice to consumer today versus looking after tomorrow. Sometimes they're not thinking all that through."

That was where advisers could help, he said.

“Advice is code for a bit of coaching. Sometime you need that to get perspective."

He said advisers could help not just with the technicalities of KiwiSaver but helping people understand what they were doing with their money and what they could do better.

Vernon said financial capability was a sliding scale and some people would be more capable while others were less, but they would all benefit from coaching.  “Advice and the role of advisers is fundamental.”

Tags: AMP

« Stubbs on attack with fee calculatorKiwiSaver: Advisers' saviour, or a lot of work for little gain? »

Special Offers

Comments from our readers

On 28 June 2017 at 10:19 am comment1 said:
This sounds like a nice sentiment but has Blair done the maths and looked at the reality. Giving away $521 for a year might not sound a lot but doing that each year for say a 40 year old until the age of 65 adds up to around $13K (without taking into account any return on that amount). Adding the return for the same period probably takes it to around $20k which is probably a reasonably significant amount for a lot of people by the time they hit retirement no matter how wealthy they are.

No matter how honourable the idea I don't think it would be a winner when you start showing these type of amounts to the "wealthy".

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

News and information about KiwiSaver

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 ▼7.65 ▼7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 ▼7.84 7.35 ▼6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼7.24 6.75 ▼6.39
Median 8.64 7.19 7.27 6.65

Last updated: 28 May 2024 11:21am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com