Investors like KiwiSaver, fret about government meddling

Wednesday 23rd July 2008

Investors who have joined the KiwiSaver scheme generally think they made the right decision though they fret about future government meddling with the programme, according to an ING (NZ) survey.

About 95% of those who joined the scheme say they made a good decision, according to the quarterly survey. Some 50% are concerned the government may significantly change or abolish KiwiSaver, down from 54% in the previous survey.

"If we are to keep seeing positive increases in the number of people joining KiwiSaver, the main political parties will need to continue to provide additional reassurance that the scheme, and the benefits that are on offer as part of the scheme, are here to stay," said Steven Giannoulis, ING's general manager of investor services.

More than 700,000 people had signed up to KiwiSaver retirement savings scheme as of its first 12 months ended this month. As at July 1,718,000 New Zealanders had enrolled, more than twice the forecast 275,000, as people were attracted to the scheme's NZ$1,000 tax-free incentive, tax credits and fee subsidy.

The number of people joining the scheme because of concern about market volatility jumped to 17% from 7% in the previous survey. The NZX 50 Index has dropped 12% in the past three months, extending its 12 month slide to about 28%.

The survey was of 100 private investors aged 30 years or more, with disposable assets or investments of at least US$100,000. ING has more than 130,000 members enrolled in the scheme, amounting to 20% of the total.

By Jonathan Underhill

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