Category: Radio New Zealand

Source: Radio New Zealand

A man who says he is facing repossession of his vehicle, the loss of items in storage and the forced sale of his house says it takes too long to access money in KiwiSaver.

Mark, who did not want to be identified publicly, contacted RNZ upset at the delays he was facing.

“I have battled with ASB for almost a month now trying to access some of my KiwiSaver. It is an absolutely horrific process, with long delays, repeated requests for the same information. Evidence of everything, even though I also had to sign a declaration in front of a justice of the peace.

“Today I sent them my last email. I’ve given up and will just have to see my car repossessed, personal belongings in storage auctioned off, and spend Christmas alone. I know they didn’t put me in this position, but they sure as hell aren’t helping me get out.

“It is by far the most gruelling, inhumane, humbling, revolting process I have ever been through – at a particularly stressful time when all you want is assistance and access to your own money.”

He said he had given evidence of loans from family and friends but the bank wanted declarations of what had been lent, the agreed terms and repayments required.

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“I have already stated that while there is an expectation of repayment there are no terms, and I was not prepared to divulge to the lenders just how bad things had got that I was dipping into my KiwiSaver.”

RNZ contacted ASB on Tuesday and he received an email the same day to tell him that his application was with the scheme’s supervisor and it could take five days for a decision to be made.

“The car is being repossessed unless I pay $7000 today.”

David Callahan, general manager of corporate trustee services at Public Trust, which is a supervisor for a number of KiwiSaver schemes including ASB, said December was always a busy month for KiwiSaver financial hardship withdrawals.

“That reflects it’s been a tough year financially for many people, and with essential bills pilling up, some families are limping to the finish line. We’re hearing that many providers are dealing with a surge in financial hardship applications and those high volumes are creating processing backlogs. For members counting on funds to come through urgently, any delay is bound to be frustrating.

“As a supervisor, we prioritise quick and efficient turnaround of applications as soon as they reach us for a decision. To ensure support reaches those who need it, our team will continue assessing applications throughout the holiday period.”

The number of people making withdrawals for hardship reasons had increased a lot in recent years.

In November, 5380 KiwiSaver members withdrew savings for hardship reasons, up from 4950 a year earlier.

Dean Anderson, founder of Kernel Wealth said the industry had increased its resourcing to support this and both providers and supervisors were monitoring response times.

“However, the process can still feel slow for members who are under financial stress.

“One of the main causes of delay is the amount of documentation required. If the information provided with an application is incomplete or unclear, there can be multiple rounds of follow up, and that back and forth can significantly extend the time it takes to make a decision and process a payment.”

He said the hardship process could be improved.

“One option would be to shift hardship assessments to a central government function – for example, within the Ministry of Social Development – or a similar agency tasked with both consistency and customer support. A central team could apply the hardship criteria more consistently across all providers, consider whether other forms of assistance or benefits such as those available through Work and Income might be more appropriate or effective than accessing retirement savings and help ensure that withdrawing KiwiSaver funds is genuinely a last resort rather than the first response to financial pressure.

“Our view is that KiwiSaver is primarily a long term retirement savings vehicle, so hardship withdrawals should be available where needed, but managed in a way that is both timely and consistent, and integrated with the broader support systems already in place for New Zealanders in financial difficulty.”

ASB has not yet responded to a request for comment.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

The retail, construction and manufacturing sectors are cautiously optimistic about recent growth in the country’s economy.

Stats NZ data showed gross domestic product (GDP) – the broad measure of economic growth – rose 1.1 percent in the September quarter.

This followed a 1 percent fall in the June 2025 quarter.

The strongest sector was manufacturing, which grew 2.2 percent, and there were smaller positive contributions from real estate services, retail, and energy and water industries.

Finance Minister Nicola Willis believed Christmas had come early for New Zealanders, and said the growth showed there were better times ahead.

But her optimism was not shared by members of the public in Christchurch.

“I was made redundant about eight weeks ago for the first time in my life and I have an appointment with Work and Income tomorrow.

“I am pretty disappointed with the economy and what this government is doing,” one woman said.

“I did what (Prime Minister Christopher) Luxon said, I got off the benefit and went to work and where did it get me… nowhere,” another person said.

Among the strongest sectors was construction, rising 1.7 percent in the quarter.

Construction Industry Council executive director Tommy Honey said its members remained cautiously optimistic, but wanted to see a few more quarters of growth.

“When we had our members’ meeting in late November, a number of our members reported in their areas that there was more work being requested, and more work coming online and that’s always the important thing, it’s not just how the economy is doing,” he said.

Retail sales only improved slightly, up 1.2 percent.

Retail New Zealand chief executive Carolyn Young admitted the sector was still struggling.

“We haven’t seen that growth in that September quarter, but when you see overall growth for the economy, it will eventually come through into retail.

“We are really dictated by consumer confidence at the moment and what confidence consumers have that they’ve got their job, that they’ve got security, and that they can afford the items they need to purchase.”

Manufacturing also went up 2.2 percent and Employers and Manufacturers Association head of advocacy Alan McDonald said only time would tell if the economy was really on an upward trend.

“If we can get a couple quarters of positive, that will go a long way to restoring a lot more confidence across the business sector.

“As the figures point out there are some sectors are doing better than others, but some are still struggling a bit,” he said.

McDonald said while the recovery signs were there, it did not take much to knock back confidence – and having a positive next few quarters would go a long way.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Savings account rates generally aren’t offering enough interest to keep up with inflation. But what are savers’ options if they don’t want to see their money going backwards?

Reserve Bank data shows that the average interest rate paid by bonus-paying savings account, such as those that reward someone when they make regular deposits or don’t withdraw, was 1.82 percent in November.

Other types of savings accounts had much lower rates, nearer one percent.

Inflation as measured by the consumer price index has been running at three percent.

Dean Anderson, founder of Kernel Wealth, said there had been clear cycles over time when the return on savings accounts after inflation had moved between positive and negative.

“In the years following the Global Financial Crisis, interest rates fell but inflation was also relatively low, so real returns on cash were small but often still slightly positive.

“From around 2013-2019 we had a ‘low rate, low inflation’ environment – the so called new normal – which typically meant modest, but not exciting, real returns for savers.

“Covid then changed the picture. Policy rates were cut to record lows, and more recently raised sharply to combat a spike in inflation. The result is that many savers have been earning a zero to negative real return: after inflation, and especially after tax on interest, the purchasing power of their savings has often been going backwards.

“That doesn’t mean holding cash is always a bad idea. Cash and on call savings still play an important role – for example, as a buffer for emergencies, as a short-term parking place for funds, or as a deposit for a home. But it does mean cash is usually not a great sole solution for long-term wealth building.”

Reserve Bank data also shows there is $118.4 billion in savings accounts, up from $110.7 billion a year ago.

There has also been growth in the amount of money in transaction accounts, which often pay no interest at all, up from $123.4 billion to $139.9 billion.

Term deposit balances have grown from $227.4 billion to $228.6 billion over the same period.

David Cunningham, chief executive at Squirrel, said it could be due to customer inertia.

“When interest rates are high, a savings account is as good a place to have your money as any, but when interest rates fall they become really very unattractive relative to term deposits, for example.

“Why would you have money sitting in Westpac’s standard savers account, which I think is called Simple Saver or something like that, at 0.05 percent. You know, five basis points. I mean, it’s as good as zero, right?

“It really is apathy. Why would you have money sitting in a transaction account? Lots of people will probably have a thousand or two, just free cash flow but there are people with tens of thousands of dollars sitting in transaction accounts.”

He said it made the banks money.

“It’s the classic ‘pay the rate-sensitive customer and effectively subsidise it from the non-rate sensitive customer or the customer displaying inertia’. That’s one of the secrets of banking.”

He said it was sometimes the case that people did not even realise the rates they were getting.

It was not displayed clearly on internet banking homepages.

“What would the answer be? You get it on your home screen where it displays the balance… if it showed the interest rate, people would wake up, wouldn’t they? “

So what can you do about it?

Anderson said there were a few things people could think about to boost their returns,

If they needed their money in the next year or two it should be in cash or short-term deposits even if they were getting a lower return.

“Longer term goals may benefit from a more diversified mix of assets that have a better chance of outpacing inflation.

“As term deposits mature into a lower rate environment, it’s a natural time to reassess whether all of your savings should stay in cash, or whether some could be allocated to other income generating or growth investments.”

He said people comparing returns should look at them after tax, inflation and fees rather than the headline rate.

“Cash Plus managed funds can be a compelling alternative to traditional term deposits or flexible savings accounts. Structured as a diversified fund, they invest in cash and cash equivalents – like bonds and short-term deposits. While their value can fluctuate slightly, they typically aim to provide a yield that is competitive with, or superior to, traditional savings and term deposits, while still being liquid.”

He said a defensive fund could also be an option. These have a higher proportion of income-generating assets.

Liz Koh, founder of Enrich Retirement, said people were missing the point if they were worrying about savings account interest rates.

“The bank is a place where you keep money safely until you want to spend it or invest it elsewhere. You should not rely on bank deposits for income. Bank deposits should be kept to the minimum of what you need in cash for the next two to five years and the rest should be invested in other asset classes or diversified funds to provide both income and growth. When interest rates are low you don’t want to be paying fees on investment products that invest primarily in cash or cash equivalents as you could well get a negative return after fees.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand