More Kiwis are actively seeking retirement planning and KiwiSaver advice, as three quarters of New Zealanders reveal concerns about the impact of COVID-19 on their financial situation.
These are the findings from two separate AMP Wealth Management surveys of more than 2,000 New Zealanders conducted prior to and during the COVID-19 crisis.
On the back of a majority of New Zealanders’ household incomes being negatively affected from either salary cuts, redundancies or working fewer hours, there has been a noticeable uplift in the number of people (1 in 5) requesting financial retirement advice/planning compared to before the pandemic struck.
This is significant given Kiwis’ typical reluctance to seek help when it comes to money. Those in their early 40s in particular have been nudged into action.
Blair Vernon, Chief Executive of specialist KiwiSaver provider, AMP Wealth Management, says despite the financial challenges facing most Kiwis, there are very encouraging signs that the majority of Kiwis are getting organised and looking to the future with cautious optimism.
“Nearly 90 percent of KiwiSaver members have maintained the status quo with their schemes during COVID-19 according to the survey, and the message that ‘KiwiSaver is best played as a long game’ seems to be resonating for most, and that’s great to see.
“A comparison of results from the two surveys showed that despite widespread concern about personal finances in the short and medium term, there was overall positivity about people’s financial situation in retirement remaining stable,” says Vernon.
Findings also showed that since the pandemic began, New Zealanders were placing greater importance on the need to have a financial plan for their retirement.
“Despite 60% of households experiencing a negative impact to their incomes, a similarly high percentage of KiwiSavers – nearly 6 in 10 – would maintain their KiwiSaver contributions at the expense of other outgoings,” says Vernon.
In fact, KiwiSaver rated No. 2 - second only to mortgages or rent - when people were asked to rank their priority of expenditures.
Vernon adds that what we’ve seen shows that more Kiwis understand the importance of having a solid plan they can stick to during even challenging times like now, and that’s really positive.
“If you’re in the right KiwiSaver fund or funds to suit your long-term goals and you stick to your plan, you’re in a good position to weather this current storm and enjoy the benefits of a lifetime of working when you retire.”
Further findings in the AMP commissioned surveys included:
- Approximately 70% of people surveyed intend to make a financial change as a result of the Covid-19 situation. Most commonly this is reducing spending – just over half intend to.
- 80% are worried about the health of the New Zealand economy since COVID-19.
- There was a significant uplift in the proportion strongly agreeing that they wish they’d started saving for retirement at a younger age (21% in April vs. 15% in March).
- Only about 1% of those surveyed have either suspended or altered the amount of their KiwiSaver contributions since COVID-19.
- Only around a quarter of people surveyed know what their KiwiSaver balance may be when they retire.
Click here to find out how much you can expect to have in KiwiSaver come retirement, and for a little help planning for your future, click here.