A review of New Zealand’s retirement policies found considerable inequality in how kiwis experience their later years.
Retirees are living less in their own homes, and many are struggling to get food and rent, according to the Retirement Commission.
Retirement Commissioner Jane Wrightson said a comfortable retirement was no longer a certainty.
“We are trying to break the myth of the dominant retirement story that the wealthy own their own homes and have enough capital to live comfortably.
“That’s 50% of the population, and it’s going to fluctuate a bit, but it’s going to decline in the next 10 or 20 years.”
About a third of retirees are renting, and Wrightson expects that number to double by 2048.
Maori, Pacifica, and women had the greatest focus in this latest review.
“That’s because, generally speaking, they earn less while they’re working,” she said.
“They would have suffered more than normal life shocks and would have taken time off from work to care for them.”
It is important for these communities to keep the NZ supermarket eligibility age at 65 to avoid further inequalities, she said.
But the money didn’t go the way it used to. More and more retirees are in debt to live comfortably.
Natalie Vincent is CEO of Ngā Tāngata Microfinance, a provider of low interest loans. save kiwi from debtShe said many of her clients have retired.
“In the last 12 months, we’ve seen an increase in people applying for small loans to pay off unmanageable debt or buy something,” she said. increased by nearly %. [the over-65] Age group. “
Retirees often used loans just to maintain their daily necessities, from car repairs to weekly shopping.
“We’re talking about debt to buy things you need. It could be a car loan, it could be white goods,” she said.
“More and more people are reaching retirement age, with no savings, and no nest eggs.”
61% of Ngā Tāngata’s older clients are women.
Susie Morrissey, policy director for the Retirement Commission, said retired women are having a harder time than men.
“Women, on average, consume 20% less kiwi savers than men,” she said. “At all ages, from under 17 to she’s over 65.”
Morrissey said a combination of factors, including the gender pay gap and lack of earnings during childbirth, make it difficult for women to save for retirement.
All this while housing gets more expensive. Morrissey said retirees spend too much on accommodations.
“The current situation is the 65- to 74-year-old group of renters, two-thirds of whom are spending 40% of their supermarket on housing,” she said.
“Among that group, 40% of them spend 80% of their retirement pension on housing.”
The commission recommended making accommodation subsidies that contribute to individual rents more accessible. The cash wealth test that determines someone’s eligibility hasn’t been adjusted since the 90’s.
Vincent said it would be a game changer.
“It’s not high enough,” she said. “People pay a significant percentage of their supermarkets on personal rent.
“Increasing the accommodation subsidy would actually significantly reduce that financial pressure and put some money back into a person’s weekly budget.”
The Retirement Commission said it would require cooperation between the government and the private sector to resolve wage inequality and housing problems.
Wrightson said morning report She had no strong views on whether the retirement age should be raised when she took office, and the recommendation made in the latest review to keep the retirement age at 65 was “evidence-based”.
“A lot has happened in the last three years,” she said.
“We’ve done 16 very deep studies and it’s now very clear that there are three stories to retirement.”
The first was the “rich man” detailed above who had a home without a mortgage.
But there were two other groups that were often overlooked in the discussion, she said: people who died prematurely — people who didn’t benefit from the old-age pensions they paid taxes for.
What’s more, Wrightson said there are “new stories” of people who had to pay rent after retirement.
“These people will have serious problems. NZ Super is supposed to have either a home without a mortgage, or a comfortable small council house, and both of these aspects …because they are under a lot of pressure.”
Wrightson said increased accommodation subsidies and recommendations for availability would help those most affected by high retirement housing costs.
“It’s a clear and quick fix that governments can implement if they choose.”
The supplement was instrument tested and the $8,100 cash/asset cap hadn’t increased in 30 years, she said.
“That rate was set 30 years ago and is based on 10% of the average home price, so there is clearly a problem.”
She admitted there were “many competing tensions” in government spending, but said she didn’t think there was enough debate about the value of the NZ Super.
“It is a poverty preventer and respects the unpaid community work done by retirees that accounts for billions of dollars worth of labor each year.”
Superannuitants also pay taxes, she added.
https://www.rnz.co.nz/news/business/479687/retirement-commission-review-suggests-more-people-set-to-retire-without-a-nest-egg Retirement Commission study suggests more people are retiring without a nest egg