Take-up of the Government's new KiwiSaver scheme appears to be growing but the number of people saving overall has dropped in the past six months, a survey by AMP has found.
The SuperWatch research revealed 71 per cent of the 500 people surveyed in February, before KiwiSaver was
launched, were saving for something. But by August the figure had dropped to 67 per cent.
At the same time, the numbers planning to join KiwiSaver have risen from 46 per cent to 48 per cent between February and August with 18 per cent already having joined the retirement scheme since its launch in July.
AMP managing director Jack Regan downplayed the savings level drop and said once the margin of error had been taken into account it was a negligible change.
"We don't think it's something to be worried about. If you look back at 2005, savings levels were down at 64 per cent - so 67 per cent is about middle of the range."
Overall retirement savings are up from 48 per cent to 54 per cent but paying off the mortgage has overtaken saving through a superannuation scheme as the key contributor to retirement saving.
In February 47 per cent were paying off their mortgage with retirement specifically in mind but this leaped to 57 per cent in August, while contributing to a private superannuation savings plan dropped from 62 per cent to 55 per cent.
Regan said in the current environment of rising interest rates it was no surprise to see mortgage repayments as a priority. "However, when you do the maths around member tax credits and employer contributions for KiwiSaver, the old maxim of saving by firstly paying off the mortgage may no longer apply."
He said the $1000 kick start from the Government as well as the matched Government contributions and the employer contribution which kicks in in April next year were compelling arguments for the scheme.
However nearly half of those surveyed (49 per cent) said they were unlikely or very unlikely to join KiwiSaver at all with 17 per cent citing their key reason as having other savings and 13 per cent believing they don't earn enough to join it.
Finance Minister Michael Cullen is expected to announce the latest KiwiSaver enrolment figures today.
