Sam Stubbs: Simplicity Founder on the number of Kiwis struggling with finances and retirement savings

It’s a difficult retirement outlook for many Kiwis. 

The latest Financial Services Council Money & You research reveals 94% of Kiwis worry about money, and one in five don’t have enough in their retirement savings to get them through the next year. 

Many are dipping into savings to cover basics, with some having to juggle priorities. 

Simplicity Founder Sam Stubbs told Ryan Bridge that a couple of things need to happen with KiwiSaver. 

He said that we’re getting to the point where it needs to become compulsory, as it’s all very well that 79% of people are saving, but that still leaves 21% who’s retirement will be funded by the taxpayer. 

The other thing, Stubbs said, is that the contribution needs to go up. 

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Episode Transcript

Speaker 1 (00:00):
Fresh calls for Kiwi Saver changes, possibly meaning that your
boss could be on the hook to stump up some
more cash for your retirement. The Financial Services Council has
found one in five kiwis don't have enough retirement savings
to get them through the next year. Seventy nine percent
of us are currently using Kiwi Saver, which is good,
but we are not saving enough to be comfortable once

(00:21):
we are there. Sam Stubbs is the simplicity KEI we
Save fun founder. Sam, Good morning, good morning, Good to
have you on the show. Do you what changes do
we need to make? Is it? Is it the contributions?

Speaker 2 (00:34):
Does it?

Speaker 1 (00:35):
Do we need more than seventy nine percent of kiwis
and Kiwisaver?

Speaker 2 (00:39):
Oh? Yeah, Look, I think I think two two really
big changes that needed. Ryan. First of all, is you know,
we're really getting to the point now where it has
to be compulsory. That's much more normal overseas, certainly the
case in Australia, because you know, it's all very well
that seventy nine percent of saving, but those twenty one
percent will have you know, nothing or almost nothing when
they retire, and that ultimately means the taxpayers pay for

(01:02):
all of it as well, So we have to get
to compulsion and I think we're kind of heading in
that direction. The other one is the contributions have to
go up, you know. To give you another contrast, In Australia,
people save on average about twelve percent of their salary.
In New Zealand it's half that, and in Australia it's
the employer who pays all of the contributions. The employee

(01:23):
doesn't pay anything. And we can get to that point,
right I mean, I know it's taking money out of
people's pockets if you're basically making them save rather than
spend right now, because you can achieve that by just
doing it in very slow increments. In Australia it actually
took twelve years for them to get to twelve percent.
It might take a step long as well, so.

Speaker 3 (01:43):
You're percent a year because we're at what the compulsory
employer at the moment is three percent, So you would
look at a phased approach because I think they're at
eleven and a half or twelve as you said in Australia,
so it's going to take a while to get it
up there, but you'll have employee as employers saying we
can't afford that.

Speaker 2 (02:00):
Yeah, and look, you know someone's going to have to pay. Ultimately,
we New Zealanders pay, whether it's the employee or the employer.
We will have to start saving more. I'd even do
less than that, Ryan, I as you do half a
percent a year, just make it really slow and gradual.
The most important thing is not that deep the amount
short term. It's the amount long term you're saving. If
it takes us a longer period of times to get there,

(02:21):
that's fine, we can do that. But let's let's get
that train leaving the station. So were as a nation
safe more because we know Ryan, personally, if we saved more,
we have more options you know in life later on
well as a nation, if we save more, we'll have
more options to Yeah.

Speaker 3 (02:37):
Sam, thank you very much for that. Great to have
you on the show that Sam Stubbs simplicity Key we
save a fund manager talking about the latest report from
the Financial Services Council. Lots of us one and five
of us don't have enough retirement savings to get through
the next year based and that's based on your current spending,
So your current lifestyle, you wouldn't be able to sustain

(02:58):
nine nine two is the number to text. How do
we all about compulsory Keipi saver. I don't like compulsory anything,
but you do look at the Australians and you think, well,
they've got it pretty good and they've been doing it
for so long, and they've got all that capital which
they're able to invest, and we're at what three percent?
And I know because that's the thought, if you're a boss,

(03:18):
if you're an employer, of adding to that one percent
a year, one percent a year or whatever it might be.
I mean, you'll be pulling your here out at the moment,
wouldn't you.

Speaker 2 (03:27):
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Speaker 3 (03:32):
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