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Speaker 1: Can we savor default rates on the up today? Mark

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Speaker 1: Greenside is worth for soth bar morning, Good morning. So

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Speaker 1: what's happening?

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Speaker 2: Well, we get first to due last year they announced

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Speaker 2: the change the government did and there's first of April,

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Speaker 2: so it's not April fool's joke. The contribution rate from

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Speaker 2: employers and employees is lifted to three and a half.

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Speaker 1: Percent today from three percent. So I note here that

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Speaker 1: they've got the word voluntary in our press release. So

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Speaker 1: do we have to do anything to make this happen?

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Speaker 2: It defaults through to the new default rate, so every

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Speaker 2: employer and employee you would go to three and a

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Speaker 2: half percent, but you can opt out if there's we

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Speaker 2: can temporary opt out if if there's a problem around

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Speaker 2: playability or vulnerability.

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Speaker 1: Cash is a little bit tight, I see, And then

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Speaker 1: it's a progressive sort of tared thing. In a couple

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Speaker 1: of years time, it's going to go up to to

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Speaker 1: four percent. You reckon, that's enough? Are we moving fast

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Speaker 1: enough on this? Well?

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Speaker 2: This has been the debate, isn't it. I think we

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Speaker 2: started ninety seventy four with an idea that we're going

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Speaker 2: to do this, but we never got kew Saver kicked

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Speaker 2: off to two thousand and seven twos and eight. And

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Speaker 2: if you take the New Zealand Super Fun which is

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Speaker 2: the government scheme, it started what was at the Comen

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Speaker 2: Fund two thousand and four. So we're miles behind some

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Speaker 2: of our fellow country people. And if you look at

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Speaker 2: rates in New Zealand, we're talking four percent in twenty

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Speaker 2: twenty eight, Australia are twelve, Britain's all up eight.

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Speaker 1: Really, Poulsey, twelve percent of the nazi's paycheck is going

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Speaker 1: to these super.

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Speaker 2: That's from the employer.

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Speaker 1: Is wow, Geese. We are behind.

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Speaker 2: So let's take one of those. Is right? Is the

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Speaker 2: government's looking at it and saying, hey, we need to

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Speaker 2: push more responsibility down to the saders. As a government,

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Speaker 2: we're getting less people paying taxes. Ie. If you go

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Speaker 2: back to the twenty years ago, there was probably six

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Speaker 2: people paying taxes to pay the retirement contribute to the

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Speaker 2: priorate tensions. Now there's probably four and we're looking to

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Speaker 2: probably be more like three or two, and twenty is time.

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Speaker 1: I think there's a general appreciation from the likes myself.

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Speaker 1: What am I thirty three thirty four? That's you know,

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Speaker 1: the super as we know it is going to be

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Speaker 1: vastly different by the time I get to retirement age,

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Speaker 1: whatever that's going to look like. So we do need

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Speaker 1: to assume some personal responsibility here. There's nothing stopping us

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Speaker 1: from contributing far more than three and a half percent

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Speaker 1: at any time.

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Speaker 2: Right, No, you can do that through your key favor

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Speaker 2: or we know also bar we had managed funds and

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Speaker 2: you can do something slightly different. But if you look

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Speaker 2: at it, if you said the average person in New

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Speaker 2: Zealand was earning, say thirty dollars an hour forty hour weeks,

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Speaker 2: so say sixty three in a year, if you start

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Speaker 2: at the age of twenty three and put away more

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Speaker 2: like that ten percent, you're allowed closer to a couple

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Speaker 2: of million dollars in retirement to the age sixty five.

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Speaker 2: At the moment Zonders get to sixty five and that

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Speaker 2: sort of average household savings about seventy thousand.

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Speaker 1: Oh ouch, that's a big difference. Oh my gosh. So

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Speaker 1: I guess now is a good time then to review

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Speaker 1: our savings and in particular, you know key we saver.

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Speaker 1: Given the way the world at the moment, mark is

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Speaker 1: now a good time to reconsider safe for instance, if

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Speaker 1: we're in a growth fund which is awfully volatile, is

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Speaker 1: it a good time to maybe consider of that such

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Speaker 1: the good idea.

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Speaker 2: Well, there's probably a gap in education around these things,

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Speaker 2: but it's fast closing. I think through podcasts and what

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Speaker 2: you can find online, you can earn a lot more

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Speaker 2: about how compounding returns work and what that means. But

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Speaker 2: if you look at someone like Australia, their pension savings

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Speaker 2: is about five trillion, New Zealand's pension savings is a

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Speaker 2: little over two hundred billion. Now, I know we're a

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Speaker 2: smaller country, but it's more a reflection of the later starting,

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Speaker 2: the less we've put into it. And of course in

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Speaker 2: New Zealand we've had this high investment in housing. Now,

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Speaker 2: even once you pay your house offt that's great, there's

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Speaker 2: lack of outgoings, but it's then what you live off.

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Speaker 2: And there's a high reliance at the moment on super

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Speaker 2: scheme is I think close to forty percent nearly up

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Speaker 2: to sixty percent at New Zealanders at sixty five and above.

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Speaker 2: If they don't get at pension savings, they don't have

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Speaker 2: a nothing and come to live on.

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Speaker 1: That's pretty scary.

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Speaker 2: Isn't it.

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Speaker 1: Wow. Good opportunity then to think ahead as changes to

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Speaker 1: keep We save a kick in today and jeez, we're

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Speaker 1: breaking it down for us Mark Greenside from Foresight