Less people saving despite KiwiSaver

June 22nd, 2009 at 9:13 am by David Farrar

The Herald reports:

The number of New Zealanders saving regularly has dropped in the past four years despite more than a quarter of adults joining .

A Retirement Commission survey carried out in March and April has found that only 49 per cent of adults aged 18 and over are now saving regularly, down from 53 per cent in the commission’s first survey in 2005.

Although 29 per cent have joined KiwiSaver, this has been partly offset by declines from 23 per cent to 18 per cent in the numbers in personal superannuation schemes, and from 16 per cent to 14 per cent for those in workplace super schemes.

This is what some predicted may happen – KiwiSaver seems to be just changing the way people save, but not increasing the number of people who save.

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24 Responses to “Less people saving despite KiwiSaver”

  1. wreck1080 (3,807 comments) says:

    Another failed labour scheme.

    I’m still hopping mad about the trains.

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  2. bruceh (102 comments) says:

    Only two answers to the issue of increasing the general savings rate – tax reductions to be able to keep more of what you earn. And productivity growth to provide increased real wages.

    Another thing would help – reducing total govt % of GDP. The govt simply sucks up too much of what is produced and returns a low yield whether in social services or in economic investment.

    This govt appears happy to keep huge pressure on the private sector during recessionary times by putting off further tax reduction and fiddling around the edges with line by line reductions in the state sector burden on the economy and social policy health of the country

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  3. Chthoniid (2,029 comments) says:

    OTOH, the RB has been recording consistent falls in the household debt-to-income ratio since 2008.

    It may be that people are actually saving at the moment by reducing their debt levels (first) rather than putting quite as much money into saving schemes.

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  4. burt (8,025 comments) says:

    Why would people save when years and years of Labour govt have been telling them that by paying high taxes they will be looked after in retirement… Oh did I miss the bit where Labour announced their welfare policies were a failure and that we need to look after ourselves ?

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  5. Bullitt (138 comments) says:

    Hopefully one small step along the way to people realising what a waste of time (and money) Kiwisaver is. I just hope its realised before Im forced into it, its bad enough I have to pay for everyone else who has already been bribed into it.

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  6. MyNameIsJack (2,415 comments) says:

    To save, one needs a surplus after paying living expenses. How much surplus is there on $12.50 an hour?

    And productivity growth to provide increased real wages.

    That’s a bit hard to achieve when a) The capitalists have exported most of the productive jobs and b) the capitalists that remain are under investing in the technology that can drive productivity growth.

    And how does a latte maker or a hairdresser improve productivity?

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  7. MyNameIsJack (2,415 comments) says:

    Bullitt (49) Vote: 0 1 Says:

    June 22nd, 2009 at 10:42 am
    Hopefully one small step along the way to people realising what a waste of time (and money) Kiwisaver is.

    maybe you could quantify this waste of time (and money). How much time does it cost you? How much money have you lost?

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  8. Ryan Sproull (7,060 comments) says:

    Less people saving despite KiwiSaver

    Fewer people distinguishing between “less” and “fewer” to spite pedants.

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  9. Yeti (64 comments) says:

    it (Kiwisaver) needs to be made compulsory

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  10. side show bob (3,660 comments) says:

    What is the incentive to save in this country? As Bruceh points out the government believes most of it is theirs anyway and acts accordingly.

    Kiwi saver is just another experiment in socialism where tax money is used to prop up a state institution. I wonder how they would be doing if they didn’t have to bribe people to join. Ultimately it will fail because the bank will have to dance to the tune of the government of the day.

    I would be very reluctant to invest in anything, schemes, or banks, promoted by government. History has proven time and time again that any money save by the peasants for that rainy day seems to disappear when the government gets hunger pains, in other words, you can’t trust the bastards.

    The answer to our ills isn’t higher saving rates by the people, it’s lower bloody spending rates by government.

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  11. adc (582 comments) says:

    fewer.

    If there’s one thing, use less. More than one thing use fewer.

    less cake
    fewer cakes

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  12. JC (933 comments) says:

    When Labour brought in the tax on $60,000+, Trusts went from $2 billion to $6 billion, companies proliferated, family went on staff in the companies, the property markets boomed and household savings went from near zero to -17%.

    Surely that tells us that the savings habit is strongly influenced by Govt actions and greed. DPFs figures show us that under Labour the Maori participation rate in tertiary education soared.. at the lower levels.

    I’m not picking on Maori here, but did we get a lift in productivity from all this? Nope, what we had from the 90s vanished and we stagnated. In short Govt taxing and spending took us down a non productive path, sent the wrong signals re saving and redirected our income streams down the cul de sac.

    In fact, I’d go so far as to say that the greater part of the US wealth over the past decades has been a general recognition that it’s governance is incompetent and money is best left with it’s citizens. Would that we had the same recognition here!

    JC

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  13. s.russell (1,580 comments) says:

    The reason fewer people are saving may be that many people don’t have cash to spare for it in recessionary times. Thus the figures may be a blip.

    Note also that a decline in the number of people saving does not mean the amount saved has declined. Maybe fewer people are saving more.

    Undoubtedly, the uptake of KiwiSaver is diverting many from other savings, for no net gain. It is possible too, that such people save less because the subsidy means they get achieve the same with a lesser input.

    But for these reasons, the figures cited are insufficient to draw strong conclusions. We need to know more.

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  14. backster (2,123 comments) says:

    SOCIALIST JACK::::::::::::That’s a bit hard to achieve when a) The capitalists have exported most of the productive jobs and b) the capitalists that remain are under investing in the technology that can drive productivity growth.

    ……….Thats because the Socialists overtaxed to waste, and they could no longer compete.

    And how does a latte maker or a hairdresser improve productivity?

    ………By working harder,longer, and improving service and quality….same as most enterprises…….

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  15. burt (8,025 comments) says:

    MyNameIsJack

    How much surplus is there on $12.50 an hour?

    After we take tax off them to give to somebody earning more than them – sweet piss all. But hey the people who pay no tax (or negative tax) are happy and they will continue to vote for corrupt self serving tossers Labour.

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  16. Chthoniid (2,029 comments) says:

    I’m not entirely sure that people who are earning $12.50 an hour should be saving for their retirement.
    At a base superannuation of 65-66% of the average wage, I imagine they will be getting a pay increase when they retire.

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  17. burt (8,025 comments) says:

    Chthoniid

    I won’t argue with the maths – but I don’t think it is safe to assume that the Govt will look after you at any set level in the future.

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  18. donkey (43 comments) says:

    my wife has 6% of salary plus depts 6%
    I had 10% of nett into shares & $1000pa kiwi saver and the mortgage.
    we own 60% of our house.
    Lotto does feature in my daydreams some days:-)

    That said we think the govt has to increasingly exit retirement funding due to the demographics.

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  19. freethinker (685 comments) says:

    bruceh (40) Vote: 10 1 Says:
    June 22nd, 2009 at 10:21 am

    “Only two answers to the issue of increasing the general savings rate – tax reductions to be able to keep more of what you earn. And productivity growth to provide increased real wages.

    Another thing would help – reducing total govt % of GDP. The govt simply sucks up too much of what is produced and returns a low yield whether in social services or in economic investment.

    This govt appears happy to keep huge pressure on the private sector during recessionary times by putting off further tax reduction and fiddling around the edges with line by line reductions in the state sector burden on the economy and social policy health of the country”

    There are other aspects Bruce lilke having something to invest in you can trust that returns something above inflation after tax – I suggest a tax free Kiwi Bank deposit account with a sensible limit that is invested soley in 80% mortgages – thus providing a reliable source of local funds to benefit Kiwis and only available from KiwiBank thus providing more employment and saving the big Aussie banks from the problem of having to borrow on the international market and sending the profits offshore and perhaps not even paying their fair share of NZ corporate tax which would in turn save the IRD and F***ing lawyers wasting taxpayers/shareholders money on a legal shit fight. Bill – are you listening??

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  20. Ratbiter (1,265 comments) says:

    FEWER people saving despite KiwiSaver.

    FEWER.

    Not LESS.

    Countable = FEWER.
    Non countable = LESS.

    Less water in the lake.
    Fewer jellybeans in the jar.

    F.F.S.

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  21. Owen McShane (1,226 comments) says:

    And its cervical not cerveyacal.

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  22. Tauhei Notts (1,650 comments) says:

    JC at 11.34 a.m.
    Brilliantly written.
    Are you the same JC who got dunked by John the “B” in the River Jordan?

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  23. Banana Llama (1,105 comments) says:

    Only way i managed to save a tidy sum was living in a dive that flooded every winter, like other commentators say, it’s not surprising people find it difficult to save in a society built on government spending.

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  24. Glutaemus Maximus (2,207 comments) says:

    When Argentina hit a credit problem about 18 months ago.

    The Government simply ‘adopted’ all the pension fund cash residing onshore.

    They promised to pay it back of course. But it simply shows how you can’t trust any Government. Ever.

    Could it happen here? Hmmmmm.

    Saving is a great idea. Getting shafted by a savings scheme is quite another matter. Property has been the main ‘Savings Shield’ in NZ.

    Problem is that it has completely distorted the market and left the resulting mortgage debt problem with the next generation.

    Kiwisaver is a sensible scheme, but unless the funds accrued are invested really well, it can be a disaster.

    As for superannuation post 2030. I reckon it will be down to the individual to have made personal arrangements.

    There needs to be much more thought given to the whole subject matter. It really is complicated, and very easy to get the

    actuarial rates horribly wrong.

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