More people are taking part in KiwiSaver compared with three years ago but more now also believe their standard of living will drop in retirement, research by KiwiSaver provider Mercer has found.
The Mercer KiwiSaver Sentiment Index Study surveyed 1000 working people and found participation in the Government's retirement savings scheme had increased from 44 per cent in 2009 to 61 per cent as of February. But it also raised concerns about the level of preparedness for retirement and revealed more people are thinking about how much money they will have when they retire.
The survey found 39 per cent had given some thought to their retirement and 15 per cent had made preparations.
But 45 per cent said they had done very little to prepare for retirement. Of those over 45 years of age 32 per cent had given very little thought to retirement. The research also revealed 52 per cent believe they will be less comfortable in retirement than they are now, compared with only 42 per cent saying the same in 2007.
Mercer New Zealand chief executive Martin Lewington said people had gained a more realistic understanding about how much they needed to save for retirement.
"Members continue to demonstrate a desire to retire at 57, but now expect this will be pushed back to 65, or even 70 years to ensure they can live a comfortable lifestyle," Lewington said. The survey showed most people are satisfied with their KiwiSaver provider and are likely to remain with their current provider for the next year.
It found the most important factors savers wanted to see from their provider were competitive fees and performance and good communication.
More people now want their providers to reduce fees - 21 per cent up from 13 per cent in 2009.
However the biggest change savers want is a reduction in tax on their investment earnings.
"Overall the study shows there has been a good take-up of KiwiSaver, with the majority of members believing the scheme will be beneficial to them," Lewington said.
"There has also been a reduction in the anticipated reliance on government funding and aged pension, as more individuals realise that a generous NZ Super scheme won't be a viable option for our ageing population."
Introducing a minimum 2 per cent contribution rate had also helped drive take-up of the scheme, with 41 per cent now contributing at 2 per cent - up from 29 per cent in 2009.
Lewington said it had made KiwiSaver more affordable.
"In 2009 14 per cent said making contributions would have no impact on household budgets - that has risen to 30 per cent in 2012."
But the study also found some people are still uncertain about KiwiSaver with their biggest concerns the impact of global market volatility on their savings, and whether the Government will continue to support the scheme in its present form.
What people think
61 per cent of working people are taking part in KiwiSaver.
21 per cent want providers to reduce fees.
45 per cent had done very little to prepare for retirement.
52 per cent believe they will be less comfortable in retirement.