Jane Wrightson: Retirement Commissioner on the number of self-employed people contributing to their KiwiSaver

Self-employed Kiwis are prioritising their businesses rather than thinking about retirement. 

A report by the Retirement Commission and accounting firm Hnry shows just 44% of self-employed people actively contribute to KiwiSaver. 

This is compared to 78% of employees. 

The report also reveals 41% of self-employed workers don't get any government KiwiSaver contribution.  

Retirement Commissioner Jane Wrightson told Mike Hosking they're having to make trade-offs. 

She says employees get contributions from their employers, but self-employed people are having to pay themselves. 

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Episode Transcript

Speaker 1 (00:00):
You're report into our retirement readiness. There's a concern out
of the growing gap between the self employed and the employee.
So what we got is forty four percent of the
self employed contribute to Key. We say, but not many,
especially when you compare it to the seventy eight percent
of employees. Jane Wrightson is, of course the Retirement Commissioner
anders with us, Jane morning to.

Speaker 2 (00:16):
You, good morning man.

Speaker 1 (00:18):
That do we have good data on this? Is that
gap widening? What do we know?

Speaker 2 (00:22):
This is the first time we've managed to pull it
all together because it takes it hasn't been any data before.
So we've pulled together some information from the Henry people,
who have a really large database of course for sole
traders and single earner people, plus some stuff from stats
and the rest of it. It's taken quite a while,
but it's given us a really interesting picture which we

(00:44):
didn't have before. And as you say, four hundred and
twenty thousand at minimum, because I think there'll be more now.
Our people identify as self employed and their retirement planning
isn't great.

Speaker 1 (00:55):
Well, when you say that just because they're not in Key,
we say, it doesn't mean it isn't great, they'll have
an asset.

Speaker 2 (00:59):
That are you.

Speaker 1 (01:00):
We've got an asset. I've got a business, I've got
good will, I'll sell it. I'm rich.

Speaker 2 (01:04):
Yeah, it's a really good point. And some people, indeed,
I'm sure we'll be saying exactly that they're investing in
their business and they're investing in themselves. But what we
know is that nearly half of the respondents in this
survey are saying that the reason is the lack of
spare income and nineteen percent of saving nothing at all.
So it's still a reasonable chunk. Do you reckon?

Speaker 1 (01:24):
That's real? Because I go back to the Singapore story
and though were a third world country when League one
you came along and said you've got a twenty eight
percent or whatever it was, And when what are you
talking about? We've got no money. You've got no money.
If you think you've got no money, isn't that really
the problem?

Speaker 2 (01:38):
Possibly it's I mean it's pretty tight out there as
you know. So again I think the self employed and
sole traders have always got this trade off. Haven't they
to go sho invest in the business or have I
justing enough to cover my overheads? I'm not really sure
what employee is have got, of course, is the employer contribution,
and there's nothing there for self employed, so they've got
to kind of pay themselves if you like, and they

(01:59):
could pay them sells through their business. But they also
need to think a bit more about the future because
don't we all yes, and it's going to be a
bit tricky for them. And the reason this is important
is you don't want them rocking up to pension age
and having basically nothing put away, particularly if the business
has failed or something else has happened, because then you
start talking about what they need in terms of additional
government assistance. So it starts getting an important conversation.

Speaker 1 (02:21):
So well done for doing the work for the first time.
That's surprise world. Does anything surprise me in this country anymore?
But they've done that work for the first time. Jane
Wrts and Retirement Commissioner.

Speaker 2 (02:29):
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