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Speaker 1: Self employed people. Bit of a warning for you this

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Speaker 1: morning from the Retirement Commission self employed people investing less

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Speaker 1: than half the amount into their retirement than that of employees,

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Speaker 1: meaning they could miss out on your government contributions if

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Speaker 1: it's Keiwi saver. James Fuller is the Henry CEO and

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Speaker 1: joins me. Now, Hey, James, Hey, good morning. This is

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Speaker 1: not surprising, right because it's optional.

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Speaker 2: It is. It's not surprising. But I think with the

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Speaker 2: recent changes in the twenty twenty five budget, the problem

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Speaker 2: that we're going to face is that fewer and fewer

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Speaker 2: self employed are going to contribute to kiisaver now that

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Speaker 2: the government contribution has been half.

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Speaker 1: Do you think it's an education thing or a cost

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Speaker 1: of living thing.

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Speaker 2: I think it's a combination of the two. I think

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Speaker 2: self are fully aware that they can voluntarily pay into

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Speaker 2: their SEV saver, but I think the challenge becomes that

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Speaker 2: there's no incentive for them to do so so. Over

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Speaker 2: the last three years, eighty nine percent of government contributions

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Speaker 2: towards kiisaver have gone to salaries employees and only seven

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Speaker 2: percent have gone to the self and deployed. And that's

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Speaker 2: very stark. In contrast, to the fact that there are

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Speaker 2: twenty percent of the workforce of self employed. So it's

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Speaker 2: a real disparity there from what the government is doing.

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Speaker 1: When someone because on your app, when someone opts out

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Speaker 1: of key we Saver, do you try and tell say

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Speaker 1: to them, hey, don't do that. Here's the potential implications

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Speaker 1: of that.

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Speaker 2: We provide a lot of education to our customers. We

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Speaker 2: don't give them advice around these sorts of things, but

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Speaker 2: we do encourage them to get financial advice. I think

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Speaker 2: the key thing though, is that a lot of people

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Speaker 2: are opting out simply because the government is not contributing

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Speaker 2: as much as they were. So now thatment government contribution

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Speaker 2: has been halved, we've seen a large number of self

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Speaker 2: employed people decide, actually, I'm going to try and put

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Speaker 2: my money elsewhere. And the danger there is that they

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Speaker 2: start putting their money into maybe sort of higher risk,

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Speaker 2: shorter term investments, and that means that they won't have

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Speaker 2: enough retirement savings. And you know, it's a bit of

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Speaker 2: a short term a stress strategy from the government because

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Speaker 2: long we're potentially creating a generation of soul traders who

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Speaker 2: are going to become a burden on the state when

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Speaker 2: they come to retirement age because they won't have any savings.

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Speaker 1: Or they could. I mean, the soul traders are often

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Speaker 1: quite smart people and think for themselves, and you know,

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Speaker 1: they might have other alternative investment options that I think,

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Speaker 1: as you say, this one's not giving me what it

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Speaker 1: used to do, I'm going to move it over here

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Speaker 1: and it's a long term thing and I'm going to

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Speaker 1: make more money out of it.

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Speaker 2: Yeah, yeah, absolutely right. Soul traders are incredibly resilient about

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Speaker 2: this kind of stuff. You know, after the KIWISA, the

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Speaker 2: most common place for them to put their money is

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Speaker 2: specialist savings accounts, which is sort of thirty two and

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Speaker 2: a half percent of them are putting money aside in savings.

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Speaker 2: There the challenge with that we're seeing interest rates dropping,

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Speaker 2: so the value of those specialist savings accounts is dropic

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Speaker 2: and doesn't provide some of the financial stability longer term

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Speaker 2: that things like que favor do. So we should really

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Speaker 2: be encouraging everyone across New Zealand to be paying into

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Speaker 2: their quis favor. And actually sometimes it's down to the

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Speaker 2: government to actually proviy a level of as you said,

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Speaker 2: education level of centers to actually get off and twelve

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Speaker 2: people back onto the Kiwisaver Train.

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Speaker 1: James, appreciate your time. Thanks, thanks so much for coming

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Speaker 1: on the show.

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Speaker 2: James.

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Speaker 1: Follow the Henry CEO for more.

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Speaker 2: From Early Edition with Ryan Bridge.

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