Do most people really want compulsory KiwiSaver?

22:13, May 17 2014

Do seven in 10 people really want KiwiSaver to be compulsory?

The Financial Services Council, which is a lobby group for insurers and fund managers (many of which make money from offering KiwiSaver) said they do, and published the results of a survey to prove it. It said independent research it commissioned found 41 per cent of adults - equivalent to 1,384,000 New Zealanders aged over 18 years - felt compelled to save.

The research, covering 3060 respondents nationwide in October last year (but which was only released late last month) found 70 per cent of people supported making KiwiSaver compulsory, 65 per cent support a compulsory savings scheme, and a further 5 per cent saying they now "lean toward" supporting it, while 31.2 per cent of people said they wanted to be made to save.

A further 12.1 per cent said they didn't want to be made to save, but knew they needed to.

But do New Zealanders really want to be forced rather than choosing to save?

If the survey is correct, it would argue that many of us know what we should be doing, but need Big Brother to make us do it.


The trouble with surveys is asking the same question in two ways can result in very different answers. The simpler the question, the easier it is to believe the survey answer.

Ask people if they can live comfortably on NZ Super with no extra income and the answer will be a resounding no. NZ Super is currently $19,080.88 after tax for a single person living alone and $29,355.04 after tax for a co-habiting couple, both of whom qualify).

Many people have no experience of living on that amount of money but anyone with an income will be able to consider how they might struggle to do so, even if they are not experts in how much older people can get by on. But ask them to agree or disagree with a more complex statement and things get murkier.

The answers the FSC published resulted from it asking people to agree or disagree with a simple statement: "New Zealand does need a compulsory retirement savings scheme?".

But asking the same question and then qualifying it could result in a whole different outcome.

Here are some versions of the question, that could be asked:

"New Zealand does need a compulsory retirement savings scheme, even if it means it takes me longer to pay my mortgage off."

"New Zealand does need a compulsory retirement savings scheme, even though it brings the risk politicians may use it as an excuse to means-test NZ Super."

"New Zealand does need a compulsory retirement savings scheme, even if politicians may decide I have to invest part or all of my balance in an annuity on retirement."

"New Zealand does need a compulsory retirement savings scheme, even if it means people have less capital to start up their own businesses."

Not such an easy question is it.

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