Tuesday 20th March 2012 1 Comment
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New Zealanders aged 55-plus have increased their share of household net wealth in the past decade, mainly from investment in their own homes, and are staying in the workforce longer, according to Roy Morgan Research.
Older kiwis have 52 percent of New Zealand household net wealth, up from 43 percent in 2002, according to Roy Morgan’s state of the nation report, which focused on the importance to the economy of their wealth, spending power and contribution through employment.
The older segment has almost 69.9 percent of their gross wealth in their own home, up from 56 percent in 2002. Other investments have fallen away to 30 percent from 43.9 percent. Australians in the 55-plus age group have only 51 percent of gross wealth in their own home and 17 percent in a pension fund.
Those aged over 55 make up 23 percent of New Zealand’s workforce, up from 14 percent in 2002. Of the 303,000 people added to the workforce since 2008, about 78 percent has come from the older group, while unemployment has climbed among younger people.
“Without this increase in workforce participation from the 55 plus segment, New Zealand’s economic growth would have been slower, we would have seen labour and skill shortages and wage inflation would have increased,” Roy Morgan chief executive Michele Levine said in her address.
“This idea that older people are not contributing – that needs a rethink,” she said.
Older New Zealanders also increased their debt levels since 2002, to about 20 percent, or $32 billion of total household debt in 2011 from 13 percent, or $11 billion nine years earlier. Total growth in debt for those aged 55 plus was 183 percent in that period while for the overall population the increase was 77 percent.
Still, older kiwis aren’t heavily leveraged, as they make up 24.7 percent of the population “but it does show that they have a greater propensity to borrow compared to the past.” Levine said.
Those aged 55 plus are showing more willingness to stay working. In 2011, 11.6 percent of this group said they intended to retire in the next 12 months, down from 15.2 percent in 2002. Even among those aged 65 plus, where the intention to retire stood at 21.5 percent, the figure “has been more than countered by a 195 percent increase (86,000) in the number of them employed.”
Levine said rapid growth in the wealth of those aged 55 plus “signals the potential for leveraging or using their wealth for a range of other activities” including property investment, helping adult children buy their homes or for business start-ups.
“With banks moving away from lending to wealth management there is a possibility that our 55 plus population will become pseudo bankers for the next generation,” Levine said. “The evidence is still in that our aging population represents a real asset not a burden and there is more potential yet to be realised,” she said.
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