Barbara Wyeth has done what all the experts advised her to do and joined KiwiSaver - but it has been a struggle.
Wyeth, a cook at North Shore Hospital earning $17 an hour and now just three years off retirement age, joined the retirement saving scheme on the 4 per cent contribution rate that applied when it was launched in 2007.
With 2 per cent from her employer and a Government subsidy that has been $20 a week (halved to $10 since July), she now has almost $8000 in her account.
"There is that bit extra in there if anything happens to me, and there is not such a huge burden put on my children," she says.
But earlier this year she almost cancelled her contributions.
"I was struggling a bit financially," she says.
"The cost of living was going up - food, petrol, phone. I never got much out of the tax cuts, about $14 a week, and there was more GST on top of everything.
"I was looking at how things could change and I looked at that [KiwiSaver] and thought that's a little bit more money that I could have in my pocket."
In the end she found other ways to manage and kept up her contributions.
But she believes her employer should have to match her 4 per cent, and, as president of the Service and Food Workers Union, she advocates a tax rebate to help other low-income workers join.
She lives in a state house with relatively low rent and her children are grown up.
But under current rules, many of her colleagues with children or higher housing costs are shut out.
"They just can't afford to do it," she says. "Do you save for your retirement and go without food today?"
Both major political parties are edging towards pushing more people into the scheme. Prime Minister John Key has promised a discussion paper on "soft compulsion" - signing up all of the million or so employees who are not already in the scheme, but with a right to opt out.
Labour leader Phil Goff said last month that he wanted "a universal savings programme in New Zealand as soon as that could be achieved".
But Retirement Commissioner Diana Crossan has warned of "major issues of inequity with compulsory savings schemes" for low-paid workers.
"Many low-income families struggle to find money for new shoes and school trips now, and forcing them to save for a retirement in 40 years time would simply increase their hardship," she wrote in a recent column.
She urges both main parties to think more broadly.
"One of the issues for New Zealand is that there is an inferred social contract that owning our own home is part of our saving for our retirement," she says.
"Government will provide NZ super through taxes, and you will save for your own home, and the combination of those two things will give you a reasonable standard of living in your old age."
The Kiwi dream
Four-fifths (79 per cent) of people now aged 65-plus own their homes debt-free. Only 3 per cent of them are in poverty, defined as living on less than 60 per cent of the national median income after housing costs.
But 20 per cent of the elderly who are still paying off mortgages, and 47 per cent of those paying rent in their old age, are in poverty. Clearly a mortgage-free home is crucial.
On this count, Crossan has good reason to worry about the future. Home ownership has slipped from a 1986 peak of 74 per cent of households to 65 per cent last year.
This is partly because young people are staying longer in education, paying off student debts and putting off both babies and house-buying until later.
But Victoria University researcher Dr Philip Morrison, in a 2008 study, found that each new generation of young adults since 1986 has also failed to catch up to previous home ownership rates at any subsequent age.
Incomes have become less equal as free trade, deunionisation, privatisation, flatter taxes and benefit cuts have all weakened those on low incomes. Low-interest state lending to first home buyers has been minimal since the early 1990s.
Conversely, those on higher incomes are relatively better off. Tax advantages have encouraged them to invest their extra money in housing, pushing house prices up from about 2.5 times the average after-tax income in 1990 to about five times net incomes in 2007.
"Compelling us to divert more income to fund managers would put the Kiwi dream of home ownership out of reach of even more young New Zealanders," Crossan warns.
"Rather than compulsory retirement savings, perhaps we should be considering ways to ensure more young families are able to buy their own home and pay it off before they retire."
Yet compulsory super has always been popular, for two main reasons.
First, unions such as Wyeth's Service and Food Workers see it as a natural extension of wage packages. Union secretary John Ryall looks longingly at Australia, where the compulsory employer contribution is going up from 9 per cent to 12 per cent and workers don't have to pay anything.
"One of my nephews is working in a mine in Western Australia," he says. "He's been there about 12 years and has savings through the Australian super system like A$400,000 ($511,000) in his account."
The Council of Trade Unions advocates making KiwiSaver compulsory, keeping the minimum employee contribution at 2 per cent, which National reduced it to in 2009, and raising the Government subsidy to 2 per cent and employer contributions to 6 per cent.
Secondly, overseas schemes have built up huge savings for investment and are seen as driving the economic success of countries such as Australia and Singapore.
Act MP Sir Roger Douglas, who designed a short-lived compulsory super scheme for the Kirk Labour Government in 1975, has said "we'd have billions of dollars in the bank" if his scheme had survived.
In 1997 NZ First leader Winston Peters proposed a compulsory saving scheme that would have eventually replaced NZ super. Although his scheme was rejected in a referendum, he believes we are paying the price in the recent downgrades of New Zealand's credit rating.
"There always was going to be a day of reckoning when political parties opposed the idea of a compulsory saving regime," he says. "It has arrived now."
KiwiSaver: the answer?
After years of debate, KiwiSaver has finally created a state-subsidised saving scheme. Everyone starting a new job is enrolled automatically but can opt out after two to eight weeks.
The scheme has grown fast, partly because of a $1000 government "kickstart" for every new member. By June almost 1.8 million people had joined, including about a third of all children under 18, 60 per cent of 18- to 24-year-olds, and about half of all other age groups up to the close-off age of 65. However, a survey last year found 32 per cent of those who had not joined said they could not afford to. Another 30 per cent preferred to pay off mortgages or student loans or build up assets in other ways, 28 per cent just hadn't got around to joining yet, and a quarter were scared of losing their money.
Those in KiwiSaver estimated that they would have spent 36 per cent of their KiwiSaver contributions if they had not joined the scheme, but took the other 64 per cent from other kinds of saving or debt repayment.
After allowing for the fact that high income earners took more than the average from other kinds of saving, yet also paid higher KiwiSaver contributions, Treasury officials estimate that every dollar of member contributions increases the members' net savings by only 29c.
Members also benefit from employers' and government contributions. But the officials believe this bonus encourages people to save less in other ways, so that the net extra saving may be only marginally more - and possibly even less - than the cost of the government subsidies.
The scheme restores modest subsidies for home ownership by letting first home buyers withdraw their KiwiSaver funds, apart from the Government contributions, to buy a home after at least three years if they are in a fund that allows this.
The Government also pays $1000 for every year in the scheme, up to $5000 per person or $10,000 for a couple, for first home buyers earning under $100,000 a year and buying homes for under $400,000 in Auckland, Wellington or Queenstown or $300,000 elsewhere.
But only 1274 people withdrew funds to buy a home in the first nine months after these provisions became operative last July. An evaluation in June found many practical problems with the scheme.
"Bigger and better"
A savings working group appointed by the National Government concluded in February that New Zealand needs to save more to make us less vulnerable to foreign lenders.
It recommended lower tax rates on savings and investment plus "soft compulsion" for KiwiSaver, signing up all employees aged 18 to 64 but with an opt-out clause. Key has said National will either issue a discussion paper on this or endorse it as a policy for next month's election.
Labour promises a "bigger and better KiwiSaver" as part of a "strong savings policy". Finance spokesman David Cunliffe won't give details before a Treasury economic update due on October 25, but hints that it will move some distance towards compulsion.
"It's better to think about it as a continuum," he says.
"You can have voluntary in, voluntary out at one end, perhaps with incentives and defaults, or compulsory in, impossible out, at the other end, and in between there are shades of grey.
"So you can have something where everybody is in, or most people are in, or a few are in, and where it's impossible to get out, or difficult but possible to get out under limited circumstances, or relatively easy to opt out, or a free choice. It's a two- or three-dimensional space, but there's got to be some weighing up of the advantages of a strong savings policy."
He says Labour would help low-paid workers to save by raising the minimum wage to $15 an hour, exempting the first $5000 from income tax and taking GST off fresh fruit and vegetables.
The same policies, plus a proposed capital gains tax, would also give first home buyers a better chance against investors in the housing market. Among Labour's likely allies, NZ First still advocates compulsory saving, but the Greens favour only "soft compulsion".
At the other end of the spectrum Act is typically divided, with Douglas still backing compulsory super but leader Don Brash opposed, saying it has had only a small net effect on Australia's national savings rate and is unfair to stay-at-home parents.
The Maori Party opposes compulsion. Finance spokeswoman Rahui Katene says many families could not afford it and some have other arrangements.
Mana Party spokeswoman Sue Bradford says any more compulsion for KiwiSaver would eventually lead to means-testing the pension, as in Australia. She would rather build more state houses and boost lending to first home buyers.
A way forward?
Clearly "soft compulsion" could pick up at least the 28 per cent of non-KiwiSaver members who "just haven't got around to it".
But budget advisers warn against any "harder" kind of compulsory saving.
Vai Harris of Mangere's Pacific Island Vaiola Budgeting Service says many of her clients were lured into KiwiSaver by door-to-door sales and she has helped 27 get their money out through hardship clauses to avoid mortgagee sales or evictions.
Warren Jack of Habitat for Humanity says he encourages all Habitat applicants to join KiwiSaver for the first home subsidy, but he says they could not cope with contributing more than 2 per cent.
"When they apply to us we see their bank accounts for the last six months and some of them are going down to zero every week," he says.
"You take out a little bit more from that and what are they going to cut out?
"From time to time they would need short-term loans to make up the difference and it's just a downward spiral."
On the other hand, he sees this week-to-week existence transformed when families move into a Habitat house and realise they will be there for a long time.
"They start thinking longer term, and interestingly a lot of them go for better education, if not for themselves then for their kids," he says.
Renting in New Zealand is insecure.
Tenancy bond data show that a third of tenancies end within six months and half within 10 months.
A recent Productivity Commission paper on housing affordability says home ownership leads to better educational outcomes, more family stability and more community involvement, as well as higher living standards in retirement.
The commission is looking at making houses affordable primarily by lowering their prices through measures such as changing building controls and zoning rules and ending housing's tax advantages.
Its paper gives less attention to the other side of the equation - raising low incomes through measures such as Labour's package of raising minimum wages and cutting low-income taxes.
Jack says social housing providers are also helping to bridge the gap through schemes such as Habitat's "sweat equity", where families help to build their own and other people's homes in return for affordable mortgages.
"But our capacity is totally constrained by the funding we can rustle up," he says.
"We could do a lot more if there was more social finance available."