Latest survey results from the Commission for Financial Capability show that Māori are falling behind the rest of the population from contributing to Kiwisaver.
Unemployment and a lack of trust in the Government were two main reasons as to why Māori weren’t engaged with the voluntary retirement scheme.
The Retirement Commissioner, Diane Maxwell, admits there hasn’t been enough promotion of the scheme in Māori communities for them to really understand how it works.
“To some extent Māori don’t necessarily believe in the value of Kiwisaver. I think it means there’s perhaps not enough information out there that Māori believe is speaking directly to them and telling them what they need to know to be convinced about the value of the scheme.”
The survey also revealed that unemployment was another aspect as to why Māori weren't signed up to Kiwisaver – 50% of Māori were in this situation compared to 26% for the rest of the population.
If Māori don’t start saving for their retirement now they will be forever reliant on the Government for the pension, Ms Maxwell said.
“If Māori aren’t saving into Kiwisaver, unless they have another alternative they’ll reach retirement with less and then be more dependent on the Government and on whānau, and those whānau may not themselves have enough to assist.”
Because the majority of Māori are younger than the rest of the population, in 60 years’ time, a significant amount of Māori will be retirees and could potentially be in a vulnerable situation if there is an economic downturn.
“By mid-century one in four New Zealanders will be 60-plus, so that means that while people will be more reliant on the Government, it might be at a time when the Government has less to distribute. Dependency ratios will change so there’ll be fewer people working supporting retirees.”
Ms Maxwell said she realises the Commission needs to do more to reach out to Māori so that they can understand the value of Kiwisaver.
“To reach retirement with resources, meaning a place to live and some savings is fundamental to the health and wellbeing of Māori communities. So, I think that this is a really important discussion. I think it’s about awareness, I think it’s about belief, I think it’s about confidence in the system, and I think there’s some work to be done.”
If Māori save their money into Kiwisaver, then they will gain tino rangatiratanga (self-determination) to be able to help themselves during retirement, Ms Maxwell said.
Retirement Commission survey results
The Retirement Commission surveyed 2,200 New Zealanders and broke the responses down into ethnicities.
The results revealed that Māori were:
- More likely to be a non-contributor, i.e. they joined Kiwisaver but stopped saving – 32% v 21% of total sample
- The main reason for taking a contribution holiday = stopped working (47%)
- Reasons for not joining = more likely to be because they are not employed (50% v 26% of total sample) and because they don’t trust government not to make changes (31% v 24% of total sample)
- Lower awareness of all of the KS benefits – Member Tax Credit (30% had heard of it v 47% of total samples), Homestart (45% v 53%), Employer contributions (61% v 71%) and you can’t access the funds until 65 (50% v 63%)
- Lower awareness of which fund they are in – 48% don’t know v 33% of the total sample
- Lower awareness of how much they are contributing – 23% not sure v 14% of total sample
- More likely to say they’d recommend KS to others – 81% v 77% of total sample
- Main reason for recommending is that you can use it to buy your first home
- Lower awareness of whether they received full MTC last year – 46% said they weren’t sure v 33% of total sample