BNZ bank is urging Kiwis not to forget their financial basics as its latest Financial Futures Research showed two thirds (68%) of New Zealanders think they have a financial plan, yet only 34% actually know how much they need to save for retirement.
BNZ head of wealth and private bank, Donna Nicolof says it is alarming that people are neglecting their financial plans for their future, especially when people know that interest rates are likely to rise and there are ongoing debates about the retirement age.
“Although we become more aware of how much money we need to save for retirement as we get older, more than half (59%) of 50-64 year olds are in the dark about what they need,” said Nicolof.
“KiwiSaver by itself will simply not be enough for most New Zealanders to live a comfortable life in retirement. We need to do more.”
She said the research showing a drop in financial planning and a lack of understanding around how much is needed for retirement suggests New Zealanders are continuing to apply the ‘she’ll be right’ attitude to all aspects of their lives.
“The numbers have never been particularly strong, but it’s very concerning they are falling. In the last year, there has been a 5% drop in the number of us who have a financial plan and a 6% drop in the number of us who know how much we need to save for retirement. This suggests people are losing sight of their long-term goals and are living life for today.
“In New Zealand, there’s a real lack of a savings culture, meaning most of us aren’t saving nearly enough for the short term, let alone the long term.”
The research showed 73% of people said they have the capacity to save and 51% believe owning a house is the best way to set them up for the future.
But Nicolof said people should build buffers around this and factor in long-term goals.
“People may have a ‘she’ll be right’ attitude, but we are no longer in an environment where she will be right.”