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Otago Daily Times
12-06-2025
- Business
- Otago Daily Times
Why haven't we noticed our KiwiSaver recovering?
By Susan Edmunds of RNZ If you haven't checked your KiwiSaver balance lately, now might be a good time. While investors were told to look away and try not to think about it when markets wobbled in April, they have since recovered significantly - and fund managers say some people haven't even realised. Morningstar data shows all but the aggressive KiwiSaver category is back to where it was at the start of 2024, but even that is not far from it. Someone who put $10,000 into an aggressive fund at the start of the year would have $9957 now, based on the benchmarks that Morningstar uses to track the fund categories. In a growth fund, they would have $10,002, in a balanced fund $10,041, in a moderate fund $10.081 and a conservative fund $10,114. Compared to the end of 2023, balances are much higher. That same $10,000 put into an aggressive fund at the end of 2023 would be worth $12,204 now, even with the volatility of this year. It would be worth $11,734 in a growth fund, $11,411 in a balanced fund, $11,022 in a moderate fund and $10,712 in a conservative fund. 'So much negativity' Koura founder Rupert Carlyon said markets were back at all-time highs, but there had been little attention paid to it. "When we're talking to people, they don't believe us, when we tell them the markets have recovered," he said. "There's so much negativity in New Zealand, they think there's no way the markets are back where they were." He said it might be helpful for the New Zealand economy and consumer confidence, if people realised their investments were probably performing better than they expected. Fisher Funds international equities manager Harry Smith said, if investors had not noticed the rebound, it was probably due to loss aversion. Research has shown people tend to feel investment losses more acutely than they do a comparable gain. "We do sort of seem to not think about things as much when all is going well, but we always think about it in terms of when the equity market does drop." He said that was heightened for KiwiSaver, because people could log in and see their balances at any time. Other assets, such as a house, might also be changing in value, but most people would be unaware, because the information was not as transparent and available. "You know where your savings are or what your KiwiSaver is at any moment in time, with a slight delay of a day or two," he said. "Your home would go up or down in price as well, depending on what's going on with the economy, inflation, interest rates. "Over time, just like the sharemarket, your home goes up in price generally, but we don't have that available to us and we don't think about it in the same context as we do our KiwiSaver." He said, over the past seven years, there had been three bear markets, with a drop of more than 20 percent, when normally that level of drop would only be expected every 5-6 years. "During that period, investors have had really healthy returns. Over the last seven years from today, the global equities market delivered nearly 10.5 percent annual return, even with that volatility, so if you're a long term investor, you're getting a really healthy return in equity markets." Smith said a key reason for the market rebound was the pause on US trade tariffs and a recovery in some AI stocks that had significantly fallen earlier in the year. Pie Funds chief executive Ana-Marie Lockyer said it was a bit like petrol prices. "When petrol prices spike, everyone notices," she said. "It gets picked up in the media and people may even change their buying behaviour. "When prices ease back down, it barely registers. There's no headline saying, 'Petrol prices normal again'. "Similarly, people open their KiwiSaver app when the news is bad, but not necessarily when it's good."
RNZ News
12-06-2025
- Business
- RNZ News
Why haven't we noticed our KiwiSaver recovering?
Most funds have now rebounded from the April market wobbles. Photo: 123RF If you haven't checked your KiwiSaver balance lately, now might be a good time. While investors were told to look away and try not to think about it when markets wobbled in April, they have since recovered significantly - and fund managers say some people haven't even realised. Morningstar data shows all but the aggressive KiwiSaver category is back to where it was at the start of 2024, but even that is not far from it. Someone who put $10,000 into an aggressive fund at the start of the year would have $9957 now, based on the benchmarks that Morningstar uses to track the fund categories. In a growth fund, they would have $10,002, in a balanced fund $10,041, in a moderate fund $10.081 and a conservative fund $10,114. Compared to the end of 2023, balances are much higher. That same $10,000 put into an aggressive fund at the end of 2023 would be worth $12,204 now, even with the volatility of this year. It would be worth $11,734 in a growth fund, $11,411 in a balanced fund, $11,022 in a moderate fund and $10,712 in a conservative fund. Koura founder Rupert Carlyon said markets were back at all-time highs, but there had been little attention paid to it. "When we're talking to people, they don't believe us, when we tell them the markets have recovered," he said. "There's so much negativity in New Zealand, they think there's no way the markets are back where they were." He said it might be helpful for the New Zealand economy and consumer confidence, if people realised their investments were probably performing better than they expected. Fisher Funds international equities manager Harry Smith said, if investors had not noticed the rebound, it was probably due to loss aversion. Research has shown people tend to feel investment losses more acutely than they do a comparable gain. "We do sort of seem to not think about things as much when all is going well, but we always think about it in terms of when the equity market does drop." He said that was heightened for KiwiSaver, because people could log in and see their balances at any time. Other assets, such as a house, might also be changing in value, but most people would be unaware, because the information was not as transparent and available. "You know where your savings are or what your KiwiSaver is at any moment in time, with a slight delay of a day or two," he said. "Your home would go up or down in price as well, depending on what's going on with the economy, inflation, interest rates. "Over time, just like the sharemarket, your home goes up in price generally, but we don't have that available to us and we don't think about it in the same context as we do our KiwiSaver." He said, over the past seven years, there had been three bear markets, with a drop of more than 20 percent, when normally that level of drop would only be expected every 5-6 years. "During that period, investors have had really healthy returns. Over the last seven years from today, the global equities market delivered nearly 10.5 percent annual return, even with that volatility, so if you're a long term investor, you're getting a really healthy return in equity markets." Smith said a key reason for the market rebound was the pause on US trade tariffs and a recovery in some AI stocks that had significantly fallen earlier in the year. Pie Funds chief executive Ana-Marie Lockyer said it was a bit like petrol prices. "When petrol prices spike, everyone notices," she said. "It gets picked up in the media and people may even change their buying behaviour. "When prices ease back down, it barely registers. There's no headline saying, 'Petrol prices normal again'. "Similarly, people open their KiwiSaver app when the news is bad, but not necessarily when it's good." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Scoop
11-06-2025
- Business
- Scoop
Concerns KiwiSaver Is Being Used As ‘Piggy Bank' To Solve Financial Woes
Article – RNZ A growing number of New Zealanders are making hardship withdrawals from their retirement savings. , Money Correspondent KiwiSaver is in danger of being considered a 'piggy bank' to solve all of New Zealanders' financial woes, one provider says, and too many people are tapping into their savings on hardship grounds. Founder of Kōura KiwiSaver scheme Rupert Carlyon was wary of calls for settings to be changed to allow people to use their money to buy farms. He said KiwiSaver was already being called on to solve the country's housing and infrastructure crises. Carlyon said changing the rules to allow more withdrawals sent the wrong message to people, who should be using KiwiSaver for their retirement. Instead, they were tapping into KiwiSaver in growing numbers. In April, 4220 people withdrew savings for financial hardship reasons, up from 3700 in April 2024. They withdrew a combined $37.6 million. 'It encourages more and more people to think about it like a piggybank. It's scary what's happening in that space,' he said. He said he saw people making repeated hardship withdrawals, depleting their balance. 'People come back multiple times with the same claims… it's hard to figure out what's real and what's not.' He said it would now not be possible to close the 'hardship loophole' because people expected it to be available and any change could dent confidence in the scheme. But he said it should be tightened up so there was a limit on the number of withdrawals that could be made within a certain timeframe. 'The other part is it's very resource intensive. We spend on average up to six hours per financial hardship claim… It's hard on staff because they often have to say no when they want to say yes.' A spokesperson for Public Trust, one of the KiwiSaver supervisors, said people were not required to repay hardship withdrawals if it was found they were not necessary. 'Their future self might not thank them for dipping into their retirement savings. We see situations of real and urgent need… there are strict rules and checks in place to help ensure withdrawals are only approved for genuine financial hardship, and applicants need to sign a legal declaration confirming their situation. 'If someone doesn't use funds as intended, it could affect their ability to make another hardship withdrawal in the future.'
Scoop
11-06-2025
- Business
- Scoop
Concerns KiwiSaver Is Being Used As 'Piggy Bank' To Solve Financial Woes
KiwiSaver is in danger of being considered a "piggy bank" to solve all of New Zealanders' financial woes, one provider says, and too many people are tapping into their savings on hardship grounds. Founder of Kōura KiwiSaver scheme Rupert Carlyon was wary of calls for settings to be changed to allow people to use their money to buy farms. He said KiwiSaver was already being called on to solve the country's housing and infrastructure crises. Carlyon said changing the rules to allow more withdrawals sent the wrong message to people, who should be using KiwiSaver for their retirement. Instead, they were tapping into KiwiSaver in growing numbers. In April, 4220 people withdrew savings for financial hardship reasons, up from 3700 in April 2024. They withdrew a combined $37.6 million. "It encourages more and more people to think about it like a piggybank. It's scary what's happening in that space," he said. He said he saw people making repeated hardship withdrawals, depleting their balance. "People come back multiple times with the same claims… it's hard to figure out what's real and what's not." He said it would now not be possible to close the "hardship loophole" because people expected it to be available and any change could dent confidence in the scheme. But he said it should be tightened up so there was a limit on the number of withdrawals that could be made within a certain timeframe. "The other part is it's very resource intensive. We spend on average up to six hours per financial hardship claim... It's hard on staff because they often have to say no when they want to say yes." A spokesperson for Public Trust, one of the KiwiSaver supervisors, said people were not required to repay hardship withdrawals if it was found they were not necessary. "Their future self might not thank them for dipping into their retirement savings. We see situations of real and urgent need… there are strict rules and checks in place to help ensure withdrawals are only approved for genuine financial hardship, and applicants need to sign a legal declaration confirming their situation. "If someone doesn't use funds as intended, it could affect their ability to make another hardship withdrawal in the future."
RNZ News
11-06-2025
- Business
- RNZ News
Concerns KiwiSaver is being used as 'piggy bank' to solve financial woes
In April, 4220 people withdrew savings for financial hardship reasons, up from 3700 in April 2024. Photo: 123rf KiwiSaver is in danger of being considered a "piggy bank" to solve all of New Zealanders' financial woes, one provider says, and too many people are tapping into their savings on hardship grounds. Founder of Kōura KiwiSaver scheme Rupert Carlyon was wary of calls for settings to be changed to allow people to use their [ money to buy farms]. He said KiwiSaver was already being called on to solve the country's housing and infrastructure crises. Carlyon said changing the rules to allow more withdrawals sent the wrong message to people, who should be using KiwiSaver for their retirement. Instead, they were tapping into KiwiSaver in growing numbers. In April, 4220 people withdrew savings for financial hardship reasons, up from 3700 in April 2024. They withdrew a combined $37.6 million. "It encourages more and more people to think about it like a piggybank. It's scary what's happening in that space," he said. He said he saw people making repeated hardship withdrawals, depleting their balance. "People come back multiple times with the same claims… it's hard to figure out what's real and what's not." He said it would now not be possible to close the "hardship loophole" because people expected it to be available and any change could dent confidence in the scheme. But he said it should be tightened up so there was a limit on the number of withdrawals that could be made within a certain timeframe. "The other part is it's very resource intensive. We spend on average up to six hours per financial hardship claim... It's hard on staff because they often have to say no when they want to say yes." A spokesperson for Public Trust, one of the KiwiSaver supervisors, said people were not required to repay hardship withdrawals if it was found they were not necessary. "Their future self might not thank them for dipping into their retirement savings. We see situations of real and urgent need… there are strict rules and checks in place to help ensure withdrawals are only approved for genuine financial hardship, and applicants need to sign a legal declaration confirming their situation. "If someone doesn't use funds as intended, it could affect their ability to make another hardship withdrawal in the future." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
