The National Party’s KiwiSaver Rental Bond policy announced yesterday should be of great concern to all Kiwis, however, it is a great way to start a wider conversation on longer term KiwiSaver policy settings, says the Chief Executive of the Financial Services Council Richard Klipin.
“The policy does address a real concern for young Kiwis with the Financial Services Council research showing young Kiwis are feeling the heat of the rising cost of living crisis impacting the country,” Richard Klipin said.
“Our recent financial resilience research found that younger Kiwis are disproportionately affected by cost of living issues. Our recent survey found 64% of respondents, aged 37 or below, worry about money daily, weekly or monthly, more than any other age group.
“At the FSC, we are committed to helping all Kiwis with their financial confidence and wellbeing to ensure more young New Zealanders are financially stable and resilient to make sure they have more and better housing options available to them.
However, the Financial Services Council wants to strongly reiterate that KiwiSaver is designed to be a long term retirement and savings tool for Kiwis.
“We want to ensure the thinking of this policy has considered the impact of reducing the KiwiSaver balances of young New Zealanders and therefore the flow on effect on the long term earnings of their KiwiSaver accounts,” Richard Klipin said.
“Even small changes to policy settings can have considerable effects on KiwiSaver earnings over the term of investment.
“We want to ensure this policy and any other KiwiSaver policy initiatives from all political parties heading into this year’s election are well designed and focus on the long term investment horizon for Kiwis preparing for their retirement.
“We are calling for a full review of KiwiSaver to ensure policy settings go to the heart of its core purpose to prepare Kiwis for a dignified retirement. That will mean setting a long term strategic policy direction for KiwiSaver.
“The future of KiwiSaver is vital to the future of working Kiwis and their families. We need all political parties to understand that certainty with the policy settings will mean more certainty for New Zealanders.
“The election is an opportunity for all political parties to restate their long term commitment and support for KiwiSaver.
Next month the Financial Services Council will launch its Blueprint for Growth strategy which aims to shape policy settings to ensure New Zealanders better manage their finances, are preparing for their retirement, better understand risk and can access affordable healthcare.
“These are all long term issues that if Kiwis prepare well for, will make an extraordinary impact on the quality of their lives,” Richard Klipin says.
“As with yesterday’s policy announced by the National Party in the lead up to October’s election, the Financial Services Council welcomes the opportunity to work with all political parties to discuss how policy settings can ensure New Zealanders are financially better off in the long term."