Hnry and CFFC urge Government to reconsider KiwiSaver for the self-employed
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Hnry, a New Zealand Fintech company, along with The Commission for Financial Capability (CFFC), is urging for changes to be made to KiwiSaver to better suit the needs of the self-employed.
The CFFC, an independent government-funded organisation that focuses on helping people to get ahead financially, has been publicly calling for changes to KiwiSaver for the self-employed, including increasing the government contribution to KiwiSaver members’ funds from $521 to $2000 a year, stating that the right incentives and structure aren’t in place within the current KiwiSaver model.
Hnry says that their customer data backs up CFFCs claim and changes are needed to meet the needs of a growing independent earner economy. In fact, Hnry states nearly two-thirds of their customers are not contributing to KiwiSaver, with only 35.86% contributing at an average of 4.52%.
Hnry CEO James Fuller says that without any equivalent of the employer contribution, the majority of independent earners aren’t engaging with KiwiSaver at all, as they don’t see it as being a valuable investment.
“With about 15% of the population being independent earners, and with that number growing, we believe New Zealand needs to better encourage and assist self-employed people in planning for their financial future. We know first-hand from our customers that they often struggle when it comes to getting access to, and getting the most out of financial products such as KiwiSaver.
“The benefits of KiwiSaver tend to be skewed towards those in permanent employment, and therefore a lot of self-employed individuals simply don’t pay into KiwiSaver, or don’t understand that you can make voluntary contributions without having a permanent employer,” says Fuller.
The call for change comes as part of the Government’s 2019 Review of Retirement Income Policies, with 2019 marking the Retirement Commissioner's three-yearly Review of Retirement Income Policies.
The aim of the review is to advise Government on options to ensure all New Zealanders have a good standard of living as they age, both now and in the future.
“It’s important for anyone who is self-employed to be educated about Kiwisaver options and to take an active stance when it comes to planning for their financial future,” says Fuller.
Hnry is encouraging their customers or anyone who is self-employed to make a submission to the review before October 31st.