KiwiSaver providers need to improve their members' understanding of the savings scheme before the Government auto-enrolls workers into it, says a financial literacy expert.
Adult literacy and numeracy training service Workbase said many people lack the knowledge they need to make informed choices about KiwiSaver providers and are faced with complex investment terms and concepts. "It's probably why people end up [staying] with default providers," said Workbase chief executive Katherine Percy.
Percy said default KiwiSaver providers had a "moral obligation" to ensure the public has the right information when making decisions.
"New Zealanders are being popped into those schemes and they need to have information about them ... there are many things [providers] could do to try to build customers' and potential customers' understanding rather than assuming everyone has a high level of knowledge about investing," Percy said.
As well as providers playing their part, Percy said workers themselves should also try to improve their understanding of the savings scheme.
Percy said the problem would only get worse if the Government begins auto-enrolling workers into KiwiSaver.By Hamish Fletcher @hamishfletcher Email Hamish