The Retirement Commission's latest data on KiwiSaver balances reveals a mixed picture for New Zealanders' retirement savings. While the average balance has increased by 11.3% to $41,286, there are still significant disparities that highlight the need for further support, particularly for those on lower incomes.
One of the most striking findings is the gender gap in retirement savings. Despite women contributing the same percentage of their salary to KiwiSaver as men, they still face a 24% average gap in balances across all ages, and a 36% gap among those aged 56 to 65. This disparity underscores the ongoing impact of the gender pay gap and time out of paid work on women's retirement savings.
The data also shows that a third of KiwiSaver members have less than $10,000 in their accounts, while the number with larger balances is growing. This indicates that while the scheme is delivering strong results for many, there are still significant inequities that need to be addressed.
The Retirement Commission's Michelle Reyers emphasizes the importance of NZ Super within the retirement income system, as it doesn't penalize people for lower incomes or time out of paid work. However, she also highlights the need for the scheme to better target low-income earners and to address the impact of contribution interruptions, such as during paid parental leave.
Looking ahead, Reyers believes that the planned increase in default contribution rates to 4% will put people on a path to having adequate retirement income. However, she also stresses the importance of the government's role in ensuring that everyone, regardless of income, has access to the support they need to build a secure retirement.
In conclusion, while the KiwiSaver scheme is showing positive signs of maturity, there are still significant disparities that need to be addressed. The Retirement Commission's data highlights the need for further support, particularly for those on lower incomes, to ensure that everyone has a secure and comfortable retirement.
