KiwiSaver confidence hits record high as Kiwis eye up their investments

22 November 2021

More New Zealanders have been seeking expert financial advice to help with their investments, and this is flowing through to confidence according to the latest ASB KiwiSaver Survey.

For the three months to October, 32% of survey respondents ranked their knowledge and understanding of KiwiSaver as high (six or seven out of seven) - a survey record.

ASB senior economist Chris Tennent-Brown says events of the past year have seen Kiwis pay more attention to their investments, which he hopes is helping to boost understanding.

"For many KiwiSaver members, the start of COVID-19 was their first real experience of severe market volatility and we saw a number of people switching funds when the sharemarkets were at their weakest. KiwiSaver balances also dipped significantly at that point, however they more than recovered in the later half of last year so those that stuck with their strategy would have seen their balances recover.

"This lockdown it seems fewer people are panicking, and are instead sticking with their investment strategies, having seen what happened during the last lockdown. 

"In times of uncertainly, people can be tempted to switch to cash, and under invest and it's pleasing that lockdown doesn't seem to have triggered that response this time around.

"The sharemarket volatility last year perhaps had the benefit of encouraging people to keep more of an eye on their investments, and in turn garner some confidence as sharemarkets and investments recovered. There was a lot of media coverage of the market ups and downs too which would have played a part. 

"All in all, it's encouraging to see a significant increase in those that feel confident in their understanding of KiwiSaver and we hope this continues to lift," says Mr Tennent-Brown.

38% of respondents said they knew how much money they would need for each year of retirement, up from 29% last quarter, however 63% said they needed to be saving more - unchanged from the last quarter.

"A large proportion of those who feel confident in understanding what they need to save for retirement say they worked this out using advice or tools from financial experts, with those using a financial planner jumping up to 25% this quarter. We can also see that those relying on informal advice such as from friends and family has dipped slightly. 

"Overall, there's an increase in the number of people who've sought out financial guidance. We think that it's no coincidence that at the same time confidence is up. Hopefully that's the start of a trend. 

"However, while it's great to see more people taking an interest in their finances and understanding their financial situation, this hasn't flowed through to major behavioural changes in saving, which is the crucial part. We can see the proportion of income people feel they should be saving for retirement is still far off what they are actually saving, and this hasn't shifted much since earlier surveys.

"The best thing Kiwis can do is to talk to a financial expert or use online tools to understand how much they need to be saving, and then start working on how to get to that amount. If you have the means, even increasing your KiwiSaver contributions by 1% can make a huge difference when it comes to retirement - every little bit counts," says Mr Tennent-Brown.

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