KiwiSaver knowledge too low: Survey

Fewer than one in four New Zealanders are confident in their knowledge of KiwiSaver, a sign that the industry could do better, one bank economist says.

Monday, August 7th 2017, 6:00AM

ASB has released its latest KiwiSaver survey, which showed it was the second most common investment for New Zealanders, behind bank accounts.

But only 24% of respondents felt they were competent in terms of their knowledge of KiwiSaver.

ASB wealth economist Christ Tennent-Brown said that was concerning for the industry.

He said after 10 years of the scheme, there should be some sign that investors' knowledge was improving. "It shows there is so much work to do in the advice space and how providers communicate with clients."

The proportion of people who believed they needed to save more for their retirement fell from 64% in the same time last year to 60%.

“Investors in growth-oriented funds should have seen their balances rise strongly over the last year as growth assets have performed well, and this may be helping those investors feel they are on track for retirement," Tennent-Brown said.

Better returns were cited most often as the reason people switched KiwiSaver providers, with 29% of switchers changing provider for this reason. Fund performance was the key reason for satisfaction with KiwiSaver overall.

“Performances varied greatly over the last year. The funds with exposure to growth assets tend to have done a lot better than those that are mainly income assets. Over the past year, growth funds have returned around 10%, whereas the very conservative funds or cash funds have recorded returns in the 1.5% to 4% region,” Tennent-Brown said.

The survey found 30% of respondents strongly disagreed with the proposal to increase the pension age to 67 by 2040.

That compares to only 11% who strongly agreed.

Those who were older were less likely to approve of the move. ASB found 27% of people aged 50-59 strongly disagreed with the proposed change, and only 9% agreed.

In contrast, 16% of respondents aged under 39 strongly disagreed, and 7% strongly agreed.

Tags: KiwiSaver