Young Kiwis aren't saving - survey

Simon Power said there was "clearly a lot of work to do" in educating young New Zealanders about the importance of saving and budgeting. Photo / Mark Mitchell

Researchers find 18 to 22-year-olds have 'relatively low level of financial knowledge' compared with other countries.

More than two-thirds of young New Zealanders are not saving for their future - and just over half budget, a survey has found.

The findings come from the Financial Education and Research Centre, a joint venture between Westpac and Massey University, which has issued the baseline results for its 20-year longitudinal study - the first of its kind in New Zealand.

It found there was a "relatively low level of financial knowledge" when compared with similar studies in other countries and parents often remained the key source of informal financial education for young New Zealanders.

The survey also found that while 90 per cent recognised the importance of saving, 77 per cent of the 18 to 22-year-olds surveyed said it was not important to plan any further than four years ahead financially.

A further 52 per cent said they haven't given any thought to financial goals, spending habits and how to manage money.

The director of the centre, Dr Pushpa Wood, said the survey of 300 young Kiwis would be repeated with the same participants every five years for the next 20 years.

She said the preliminary findings would provide a benchmark for how much information young New Zealanders have on personal financial matters and where they obtain this information.

Westpac's managing director of private, wealth and insurance, former justice minister Simon Power, said there was "clearly a lot of work to do" in educating young New Zealanders about the importance of saving and budgeting.

Retirement Commissioner Diana Crossan said financial literacy as part of the OECD Programme for International Students Assessment programme was tested for the first time among Kiwi 15-year-olds in September.

The results are due early next year and will show how young New Zealanders compare against several other countries.

Of 18 to 22-year-olds surveyed:

*90 per cent recognise the importance of saving.
*80 per cent think it's better to spend savings than buy on credit.
*77 per cent don't think it's important to plan ahead financially more than four years.
*66 per cent learned everything about finances from their parents.
*52 per cent say they budget.

* Source: Fin-Ed Centre