Future uncertainty of KiwiSaver worries wealthy investors

By NZPA

Tuesday 29th April 2008

The uncertain future of KiwiSaver under a National-led government is putting off wealthy investors, a new survey shows.

KiwiSaver provider ING surveyed 100 investors aged 30 and older who had disposable assets or investments worth $NZ129,000 or more, about what they thought of the state-subsidised retirement saving scheme.

The survey found 54% of private investors were concerned the scheme may be altered or canned in future by the government.

ING investor services manager Steven Giannoulis said the uncertainty could be why only 29% of investors said they intended to join a KiwiSaver scheme.

There was a positive trend to joining -- 24% in the first quarter of this year, up from 18% in the quarter before.

Giannoulis said given volatility in the global economy investors saw value in joining a KiwiSaver scheme.

"However, what is concerning is that amongst those investors who haven't yet joined KiwiSaver, the intention to join is low," he said.

"Uncertainty around whether the Government will change the rules governing KiwiSaver seems to be holding some investors back from joining and 13% of investors indicated that it is a direct mistrust in the Government that is stopping them joining a KiwiSaver scheme."

Giannoulis called on political parties to make their positions clear before the election.

The survey also found 56% supported the scheme being made compulsory.

Only 37% supported personal tax cuts being channelled into KiwiSaver.

KiwiSaver incentives included a $1000 tax-free credit, ongoing annual tax credits, annual fee subsidy and the potential returns on investments.

The National Party previously said it would not reveal policy on the scheme until closer to the election but it intends to keep it.

Its finance spokesman Bill English recently said National would keep some form of government subsidy for people taking part in the scheme.

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