A longitudinal study being undertaken by Massey University's Fin-Ed centre has released new results showing most young people expect New Zealand Superannuation will be means-tested and the age of entitlement lifted by the time they retire - and fewer than a quarter think it will be enough to live off.
The study began in 2012 with a sample group of about 300 people aged between 18 and 22 and will follow their financial situation for a 20-year period. In April a survey put to the group asking them about planning for their retirement found 84 per cent expect the age of eligibility for NZ Super to increase and 73 per cent expect means testing to be introduced. Currently the pension is paid at 65 and is not means tested. Only 23 per cent believe NZ Super will be sufficient in retirement.
Claire Matthews, co-author of the report, said it appeared young people were being realistic about the future of New Zealand Superannuation.
"The truth is it's not sustainable for NZ Super to be available at 65. The Government needs to move sooner rather than later because the longer they leave it, the harder it is going to be," she said. "With enough time, the age of eligibility can be raised gradually, which lessens the impact on everyone."
Matthews said the survey provided evidence that younger New Zealanders accept that they will not retire with the same level of government support as today's retirees.
As of recent, the Financial Planning Industry has seen the beginning of the next generation begin to sort after advice, with this topic being one the many. It may not be time for you to begin thinking about your retirement but every decision you make with your money has an opportunity cost. After the completion of our Money Week campaign (last week) we continue to urge you to seek advice and get your money fighting fit.