Latest news with #PieFunds
RNZ News
23-05-2025
- Business
- RNZ News
People leaving relationships being kept out of the property market, financial coach says
People who've withdrawn their KiwiSaver to buy a house can't do so again after they've left a relationship. Photo: 123RF When Violet* accessed her KiwiSaver to buy a house more than a decade ago, she only had about $3000 available. She withdrew the money and received a First Home Grant to help with the purchase. But six years later she and her partner separated and sold the house. *Violet, whom RNZ has agreed not to identify, is now on her own and has built up $50,000 in her KiwiSaver. She would love to be able to buy a house for herself and her children, and $50,000 would be enough for a deposit on the type of property she would like to buy in Manawatū. But she has been told she cannot access her KiwiSaver again because she has already withdrawn money for a home. "There's no other option for me to be able to tap into that. I only used $3000 because that's all I had in KiwiSaver at the time. Now I can't access the $50,000 I've got in there now." While there is an option for "second chance" buyers to withdraw money from KiwiSaver for a second home, that only applies to people who have not used their KiwiSaver previously. They need to now be in the same financial position as a first-home buyer. Pie Funds chief executive Ana-Marie Lockyer said the criteria was fairly strict. People also needed to not have assets worth more than 20 percent of the house price cap in the area they were looking at, and needed not to have any other property ownership, even if it was only land. "It's understandable this person is frustrated, as the rules don't seem to cater for people in her position." Financial coach Shula Newland said it would take Violet many years to save a deposit for a house outside KiwiSaver, so she was effectively locked out of the market. "I really think the government needs to review the rules around being able to get money out again. "This will also help with separations, as they - mostly women - could park their money in KiwiSaver till they are ready to buy another home." She said it was a common situation at the moment because the recent drop in house prices meant many people did not have enough money left for another deposit when they sold their homes in a separation. She said women were also more likely to spend any payout on living and taking care of children after a separation, so if there was a way to keep it in KiwiSaver and withdraw it later, it could put them in a better position. In April, 3970 people withdrew savings from KiwiSaver for a first home, for a total of $167.3 million. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Scoop
22-05-2025
- Business
- Scoop
KiwiSaver Changes An Opportunity To Improve Retirement Outcomes For All
KiwiSaver changes announced in today's Budget, including lifting the default employer and employee contribution rate to 4% and extending the government contribution to 16 and 17 year olds, mark a significant opportunity to boost retirement outcomes for more New Zealanders, says Pie Funds CEO Ana-Marie Lockyer. Lockyer, a long-time advocate for improving New Zealanders' retirement outcomes and improving equity in the system, welcomed the focus on targeting government contributions to younger KiwiSavers. 'I'm pleased Finance Minister Nicola Willis has listened and acted with the future in mind. Overall, these changes reflect the Government's desire to ensure the sustainability of KiwiSaver and a comfortable retirement for all New Zealanders.' Contribution rates need to reach 10% The increase in minimum employer and employee contributions from 3% to 4% by 1 April 2028 is a step in the right direction - but Lockyer emphasised the need for this to eventually rise to a combined rate of 10%. 'A 10% combined contribution rate would help ensure a good standard of living in retirement, but we need to get there gradually,' she said. 'I'm pleased to see the increases are phased and clearly communicated, so lower-income earners in particular aren't discouraged from participating due to affordability concerns, and employees can plan ahead.' Lockyer also emphasised the long-term national benefit of growing individual savings. 'The more New Zealanders save over time through KiwiSaver, the more we can offset the growing fiscal burden of superannuation on future governments.' Encouragement for younger KiwiSavers Lockyer backed making the government contribution available to 16 and 17 year olds from 1 July 2025 - while questioning why it wasn't extended to older KiwiSavers still working. 'Thanks to the benefits of compounding interest, the earlier you start saving in life, the better your position at retirement will be. Providing more incentives to young people to save encourages stronger, more consistent contributions.' 'However, I would have liked the government contribution to be available to the increasing number of over-65s who are still working, whether by choice or necessity. They need support to save for their retirement, too.' Lockyer also acknowledged halving the maximum government contribution to $261 from 1 July 2025. 'Even a reduced annual government contribution of $261 per year can grow to more than $41,000* over a KiwiSaver member's working life. That's life-changing support for many Kiwis.' Focus must remain on outcomes With KiwiSaver under increasing focus as balances grow, Lockyer stressed the system must continue to evolve to serve the retirement needs of a broader and more diverse New Zealand. 'KiwiSaver has gone from strength to strength since it launched in 2007, and we recognise today's changes reflect the Government's tough prioritisation decisions in a constrained fiscal environment. This is a moment to start reshaping KiwiSaver into a fairer, more effective tool that helps more New Zealanders retire with dignity.' *Based on a 16 year old receiving the $261 government contribution to age 65 (not adjusted for inflation). Source:
RNZ News
13-05-2025
- Business
- RNZ News
Why your KiwiSaver balance might suddenly be healthier
Photo: RNZ / REECE BAKER It's been a hectic few months, but right now, it's a good time to be a KiwiSaver investor again. Markets have been volatile since details of US President Donald Trump's planned tariffs emerged, taking thousands off many people's KiwiSaver balances. But news that the US and China had agreed to cut tariffs temporarily have helped sharemarkets rally overnight. On Monday, US time, the S&P500 lifted 3.3 percent to its highest level since 3 March. The Dow Jones also lifted 2.8 percent and the Nasdaq lifted 4.35 percent. Indexes used as benchmarks for the KiwiSaver categories. Photo: Supplied Rupert Carlyon, founder of Kōura Wealth, said most people's KiwiSaver balances should have recovered losses made through the first quarter of this year and April. "The NZD is strong which will be impacting balances, but overall things are looking pretty good. Investors are clearly betting on continued US economic strength and the fact that the 10 percent global tariff does not materially impact growth. If the past few weeks has shown us anything it is that the 'Trump put' is clearly in effect - Trump will do everything he can to protect markets; and not to listen to what he is threatening as it is all simply negotiating tactics. "But overall - it is a great time to be a KiwiSaver investor again." At Pie Funds, founder Mike Taylor said most funds should now be "flattish" for the year to date but could be down 5 percent from the peak in February. "KiwiSaver member should note, it will probably take another one or two days for this to be reflected when they log on to their provider as there is a lag effect." Morningstar data director Greg Bunkall said there would be some funds that might not have got all the way back to where they were, because they might be positioned more defensively. "But generally the asset classes that were impacted will have largely bounced back. Looking at our indexes which we use as benchmarks for the KiwiSaver categories, they are all pretty much recovered to levels around or above where we saw them at the end of March." Indexes used as benchmarks for the KiwiSaver categories. Photo: Supplied The first effects of the tariffs were seen in the March quarter. Morningstar data for the three months showed the weakness in the markets that quarter cancelled out the effect of contributions to KiwiSaver, in aggregate. As a group, aggressive funds lost an average 3.7 percent in the quarter, growth funds 2.7 percent, balanced funds 1.7 percent, moderate funds 0.6 percent and conservative funds 0.2 percent. Default funds lost an average 1.7 percent. On an annual basis, all fund categories were up about 5 or 5.5 percent.
Scoop
01-05-2025
- Business
- Scoop
KiwiSaver Providers Mull Possible Changes To 'Free' $521 A Year
KiwiSaver providers are divided on whether changes to the $521 offered by the Government to each KiwiSaver member every year could be positive for the scheme. Speaking to NewstalkZB on Tuesday, Finance Minister Nicola Willis would not rule out changes to the KiwiSaver subsidy, including means-testing the contribution. Her office has been asked for further information. KiwiSaver contributions cost the Government about $1 billion a year, with $521 available to every member who contributes at least $1042 in a year. A criticism of the member tax credit is that it generally goes to those who can afford to save and invest in KiwiSaver, rather than lower-income households. Willis has already signalled a desire to see higher contribution rates to KiwiSaver. Pie Funds chief executive Ana-Marie Lockyer was encouraged that KiwiSaver was up for review and that Willis was considering all options to improve the settings to support retirement outcomes for New Zealanders. "It's sensible to assess whether the $1.1 billion annual spend is delivering the best possible outcomes in line with the goal of comfortable retirements for all New Zealanders," she said. Lockyer was not opposed to Government spending targeted to better address inequities in KiwiSaver, which she said would be better than removing the incentive altogether. "It's important the review isn't seen purely as a cost-saving exercise, but rather as a way to retarget the benefit to those who need it most. "Care is needed to ensure the change doesn't discourage engagement from low to middle-income earners. Remember, the $521 on its own can become $76,000 for a KiwiSaver member over time." She said redirecting support to lower-income earners would not change the appeal of the scheme for many members. "Particularly those who receive the Government contribution by default, as their incomes automatically qualify them, but [it could] positively improve equity and entice more New Zealanders at the lower end of the income spectrum to join KiwiSaver and contribute regularly - leading to more people achieving better long-term financial outcomes and ultimately reducing longer-term dependence on government support." "Means-testing the Government contribution could help ensure lower-income earners get proportionately more support, potentially encouraging more participation from that segment." A third missing out Lockyer said a bigger issue was the number of people not receiving the government contribution or not getting the full amount. "In 2024, the government paid around $990m," she said. "Based on nearly 3 million KiwiSavers between 18 and 65 total, payments have the potential to be closer to $1.5b, so nearly a third appear to be missing out. "There are many reasons for this, but in some cases, they may well be the members that need support growing their long-term retirement savings." Kōura Wealth's Rupert Carlyon said removing an incentive to saving would be short-sighted, when NZ Super was not sustainable in its current form. "The $521 is not really enough, although in an ideal world, we would be looking at the Australian system, where they use a combination of means testing and real incentives to ensure the long term sustainability of superannuation. "It shows where current Government priorities lie though, when they are looking at cutting $1b of spending to help people's futures, so they can fund an extra $1.5b in NZ Super next year. "What do they have to cut the following year to ensure they can keep providing super at the same levels? Yup, NZ Super cost grows at about $1.5b each year." Milford Asset Management's KiwiSaver head Murray Harris said Government changes to the contribution would be a "real shame". "It's one of the main incentives and reasons why people contribute, especially for the self-employed, who don't benefit from employer contributions."
