KiwiSaver Changes Reinforce Need For Good Financial Advice
Our first impression of this budget is a pragmatic, longer-term view for the country's prosperity and wealth generation, said Financial Advice New Zealand Chief Executive Nick Hakes.
'Good financial advice is now more valuable than ever to understand the impact of today's Budget's KiwiSaver announcements on people's financial goals and aspirations – whether buying a first home or saving for retirement.' – Nick Hakes, Financial Advice New Zealand Chief Executive.
Financial Advice New Zealand acknowledges the Government's Growth Budget delivered today by Finance Minister Nicola Willis.
'Our first impression of this budget is a pragmatic, longer-term view for the country's prosperity and wealth generation,' said Financial Advice New Zealand Chief Executive Nick Hakes.
'We welcome the Government's longer-term approach to encouraging Kiwis to prepare for their retirement; and younger people being able to contribute to KiwiSaver is a positive step said Financial Advice New Zealand Chief Executive Nick Hakes.
'More people participating and increasing contributions to their KiwiSaver accounts is certainly a step in the right direction but engaging with a financial adviser is vital for making the best of this savings vehicle; great advice transforms lives.'
Advisers play a critical role in making KiwiSaver work to their client's own personal circumstances by tailoring the right asset allocation for their personal goals and risk profile.
'We see this Budget point to a future where there is a deeper connection between improved financial capability levels, increased retirement savings, and great advice ensuring underlying assets are invested appropriately for all New Zealanders,' Mr Hakes said.
KiwiSaver
The Budget included increasing the KiwiSaver balances of New Zealanders by phasing in an increase in default employer and employee contribution rates from 3 to 4 per cent and extending the scheme to include16- and 17- year-olds.
However, from 1 July 2025 the government co-contribution will be halved to a maximum of $260.72 per annum and will cease for people earning more than $180,000 per annum.
'Means testing is a prudent measure for the country, though this means that different individuals will be affected in different ways,' Mr Hakes said.
Better for business
The Investment Boost tax incentive to allow an immediate 20 per cent deduction of the cost of a new asset (on top of normal depreciation) is expected to lift all kinds of business investment, including technology upgrades.
'We believe the investment boost is good for our small advice businesses as they invest in new (technology) assets to deliver advice to clients more efficiently,' Mr Hakes said.
'This is good news for the many thousands of small advice practices who serve their communities.
'In the current environment advisers are seeking new solutions to update their technology infrastructure that will better serve more clients, potentially more cost effectively, which benefits more New Zealanders.'
Future generations to benefit
Financial Advice New Zealand is also pleased to see the focus on education spending which we believe will set Kiwis up for their best futures.
'The investment in education is welcomed for our future prosperity, we see this aligned to the announcement by the Minister of Education of the introduction of financial education in schools. The more consumers are engaged in financial decision making the more likely they are to work with a professional financial adviser to reach their future goals,' Mr Hakes said.
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