New scheme will encourage Kiwis to engage with their personal finances, says firm
Leading financial institution ASB has welcomed the latest changes to KiwiSaver’s contribution rates, saying it will encourage Kiwis to engage with their personal finances and start thinking more about retirement.
Starting next week, employees can choose to contribute 6% or 10% of their income to their KiwiSaver, adding to the 3%, 4% and 8% options already available.
“The increased options around employee savings rates are really positive – we know from experience that the financial and psychological hurdle of moving from 4% to 8% was too much for many to stomach,” ASB head of KiwiSaver Aidan Vince said. “These new options mean increased savings rates will be more palatable, and give Kiwis more options for their savings.”
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ASB mentioned a recent survey it conducted, which found 60% of those surveyed felt they needed to save more for retirement, with the majority of people saying they planned to use their KiwiSaver in retirement to cover daily expenses. Vince noted 20% of members do not contribute anything at all to their KiwiSaver. Of those that do regularly contribute, most are contributing low amounts.
“This is a timely reminder for people to look at where they want to be in retirement and to start thinking about whether their current savings plan will get them there,” he added.
