New research from the Financial Services Council (FSC) shows 70% of New Zealanders are unprepared for retirement despite three-quarters investing via KiwiSaver.
The research was from the first in a three-part series, Money and You, which surveyed 2,000 Kiwis to understand how New Zealanders felt about money, their knowledge of it and how it impacted their life.
The survey also found younger New Zealanders worried more about money, were stressed financially and were least prepared for any loss of income.
Richard Klipin, FSC chief executive said the research found that it was a mixed bag when it came to New Zealanders’ relationship with money.
“Overall, the research found a strong link between money and well-being with money worries causing stress for most New Zealanders,” Klipin said.
“Given that just 21% of respondents described their financial well-being as better than moderate this suggests that money has a major impact on our health and well-being.”
The research also painted a challenging picture when it came to the financial stability of New Zealanders.
“70% of us would not be able to meet basic financial commitments such as mortgage/rent and bills beyond a short period of time if we lost our jobs; over a third of us would not be able to last beyond a month,” Klipin said.
“These challenges are particularly acute for younger New Zealanders who overall worry more about money, are more stressed financially, and are least prepared for a loss of income.”
However, the research found New Zealanders generally felt financially confident, as close to 80% of respondents were reasonably confident or higher about making financial decisions.
“This potentially misplaced confidence is likely to be a reason behind New Zealanders generally low use of financial advice and other services,” Klipin said.
“A bright spot though in Money and You is New Zealanders embrace of KiwiSaver with 75% of us now investing via the scheme.
“This level of exposure is set to be a gamechanger in coming years as KiwiSaver acts as a gateway to helping New Zealanders become more financial engaged, aware and resilient.”
The research had been conducted prior to the COVID-19 pandemic, before its full impact was known.
“Nonetheless, as we slowly return to a level of normality we hope that this research will help challenge all New Zealanders to think about how they can understand money better and build their ongoing financial resilience,” Klipin said.