Too many 'set and forget' KiwiSaver

Cole Murray director Jeremy Cole receives the KiwiSaver Practice of the Year 2016 award from Booster CEO David Beattie.

A survey by award-winning financial services company Cole Murray shows many Hawke's Bay people say they have no idea of how much they'll need to live on in retirement and three-quarters know their KiwiSaver savings won't be enough.

The Cole Murray Financial Compass Survey questioned more than 120 Hawke's Bay people with a variety of backgrounds and incomes.

Cole Murray director Jeremy Cole said 87 per cent of respondents were enrolled in KiwiSaver.

"For three-quarters of those people, however, they admitted to knowing they can't rely on KiwiSaver being enough for their retirement, but are not sure what to do about it," Mr Cole said.

"It indicates that the level of understanding about the scheme is quite low."

People were taking a "set and forget" approach to KiwiSaver instead of actively managing their funds.

"Many people are missing out on gaining the $521 annual government contribution in the form of Member Tax Credits from simply not realising they are eligible."

New Zealand needed to emulate Australia's policy of compulsory contributions of 9.5 per cent superannuation, rising to 13 per cent in future years.

"The minimum employee contribution in New Zealand is 3 per cent, rising to six percent when employers match those contributions. And that's only for people who are enrolled in KiwiSaver. We need to do more to educate people that saving the minimum is not enough, and to start boosting their savings sooner rather than later.

The survey also highlighted the demand for a financial ''health check'', with 94 per cent of those questioned saying either working it out themselves or consulting with a financial services firm would help them understand their financial position.