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KiwiSaver index lifts but knowledge lacking

New Zealanders' knowledge of KiwiSaver has increased slightly in the last quarter, but remains low, an ASB survey highlights.

  • KiwiSaver index increases by 3% points to 25%, largely reversing the previous quarter’s dip
  • KiwiSaver knowledge lacking in the 30 to 50 year old age bracket
  • Customers increasingly using apps and technology to track and manage their KiwiSaver account

New Zealanders' knowledge of KiwiSaver has increased slightly in the last quarter, but remains low, an ASB survey highlights.

The latest quarterly ASB KiwiSaver survey showed just 20% of 30 to 39 year olds, and 19% of 40 to 49 year olds, rated their understanding of KiwiSaver as high (6 or 7 out of 7) compared with 28% of under 30s, 32% of 50 to 59 year olds and 27% of over 60s.

"The overall level of knowledge and confidence is low, but the result for the 30 to 49 year age bracket is particularly worrying, as those are strong earning years when people need to be making good decisions about retirement savings," ASB senior wealth economist Chris Tennent-Brown says.

"We can't be too careful with younger savers either, even though they may be more confident in their understanding of KiwiSaver. Many people under 30 are yet to endure the inevitable periods of volatility that impact investments, so it's still important to work on the KiwiSaver knowledge of under 30 year old savers."

"Understanding also varied by income and by gender, but whichever way we break it down there's work to do to help lift knowledge and understanding of KiwiSaver. This will become increasingly important as member balances grow," Tennent-Brown says.

"Scheme providers face the challenge of engaging with investors, and the traditional channels of investment documents such as product disclosure statements and investment reports won't cut the mustard for many investors."

"Portable devices and smartphones are fast becoming the main way KiwiSaver members are checking their balance, at the expense of paper bank statements and even computers. In the last quarter, smartphone use to check KiwiSaver accounts grew from 32% to 38%," Tennent-Brown says.

The latest survey shows that waiting on a mailed statement dropped from 17% to 14% and access via a desktop or laptop computer dropped from 66% to 55%. Of the remaining respondents, 9% used a tablet to check and 5% say they haven't accessed or checked their balance.

The survey shows 3% of respondents visited a branch and 2% phoned a contact centre or branch.  

"Even during a branch visit or phone call, technology can be playing a part in these traditional contacts. Frontline staff are using tools and computer programmes to talk about KiwiSaver with customers. Last year for example, ASB had over 60,000 conversations with customers that involved ASB's computer-based tool KiwiSaver Explorer."

Within the latest survey, good returns were once again cited as the main reason for satisfaction with KiwiSaver overall by 30% of those surveyed, followed by 24% who cited ease of use. 

"This highlights how important mobile devices are for investors, and that's not just to check balances. Since launching new features for the ASB KiwiSaver Scheme within ASB's Mobile app recently, thousands of people have used it to get a fund recommendation or to change funds," Tennent-Brown says.

Despite the uptake of Mobile apps and other technology to support investors, Tennent-Brown says there is still more work to do to help people understand what types of assets their KiwiSaver fund invests in, and what it means for past performance and expected returns.  "

For savers who are in a default fund and have not yet made an active choice, it's really important to check-in and make sure they are in the right fund and maximising the benefits of KiwiSaver, and now that can be done face-to-face, over the phone, or using an app." Tennent-Brown says.

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