Raising KiwiSaver contribution rates or making the scheme compulsory would not necessarily leave New Zealand households better off, the New Zealand Institute of Economic Research has said, according to RNZ. A new NZIER paper examines what families might have to give up to pay more into the retirement scheme and whether total saving would actually rise.
It suggests people who already save elsewhere may simply move money into KiwiSaver, while those with little spare income could have to cut spending or borrow more. Its modelling found single parents earning $50,000 or $75,000 would fall short at every higher rate tested, and couples on $75,000 each with two children would struggle above 4 per cent. Senior economist Roshen Kulwant said policymakers needed to be clear about which problem they were trying to solve.
Source: RNZ