The editor has been on a Southern road trip. Back for Xmas and 2023
Another tick for NZ Superannuation.
Many NZ Commentators, Policy makers and Politicians cannot recognize good policy if they fell over it. Beware of these people, Hosking, Seymour, Bagrie and current National Party Leader Luxon who want to make changes, that will affect the age of entitlement, and the simplicity and the quality of New Zealand Superannuation. 
For years Kaspanz as an organisation and its membership (2013 formed for this very reason), have been praising the quality of NZ Superannuation, sometimes a lone voice with a constant tick of approval for this very important element of NZ robust retirement income policy.
Kaspanz has been consistent, many (40% plus) only have NZ Superannuation as their retirement income, and virtually all over 50 have planned retirement income on the basis for receiving NZ Superannuation at 65.
The Myth that many New Zealanders don’t need NZ Super has been around for 4 decades plus, contrary to research and serious evaluation,
No alternative proposals come close, it provides the benchmark platform for retirement, always add too good policy and never take away.
I’d probably be on the streets without it’, pensioner tells NZ Super researcher
Kevin Norquay Jul 24 2022
Soaring petrol prices are isolating pensioners from family, friends and healthcare as they fight a rising wave of costs, and battle falls in the value of investments.
Money is a major stress for pensioners as they try to predict how long they will live, and how much they will need to live that long. Petrol is so expensive, Superannuitants are reluctant to buy it, says a research report into pensioner lifestyles.
In those stormy seas, Super looms as a beacon of certainty, says Older People’s Voices: Qualitative Research with New Zealanders Aged 65 or Older.
“NZ Super is not perceived to be sufficient to cover even a basic standard of living,” says the report, part of a review of retirement income policies.
But Super is considered essential, and lifesaving for some, says report writer Dr Jo Gamble, research lead at Te Ara Ahunga Ora Retirement Commission.
“I’d probably be living on the streets without it,” one North Island male pensioner tells the study.
An Auckland man says: “I’d resort to bank robbing … I’m very grateful for it, it’s not enough, but I’m very grateful.”
Another participant was concerned about having to go into debt to eat: “We’ve got to that stage… where your food suppliers are having to let you buy food on tick!” says a Dunedin woman.
For those on higher income Super provides “freedom/independence and choice”, the report finds.
Retirement Commissioner Jane Wrightson tells Stuff the findings “surprised me in some ways, that Super was turning out to be so important”.
She says the stereotype around the current generation of retirees is that they are largely wealthy and “they don’t need it”.
“While this is a very small sample, you can see that in many quarters this is absolutely not true,” she says. “It provides some really rich insights.”
This research was as part of a policy review, with Wrightson intent on hearing from Superannuitants for their insights “so they don’t get lost amid all the policy and practice stuff”.
“Obviously, with the way the markets are performing at the moment, there are people who may have been comfortable a year ago, who will now be worried. So it’s not all easy out there, and we know it.”
Four in 10 people aged 65 and over have virtually no other income besides NZ Super, and another two have only a little more. Even with NZ Super, about one in three don’t think they will have enough for retirement unless they continue working past 65.
Superannuitants are increasingly relying on additional allowances or having to go without the essentials of food, health or power, says Gamble, a psychologist.
“Of some concerns are comments that petrol/car costs are preventing people from leaving the house, limiting access to healthcare and exacerbating feelings of isolation.
“There is mounting concern about NZ’s health system – people believe cracks are showing and those who have experienced poor health (directly or indirectly) are anxious about how well they might be cared for in future.
“Combined with increasing costs of travel and medical expenses, older people believe they are facing more barriers to accessing proper healthcare.”
There may be a need to examine what other means of support exist for health-related costs, says Gamble, who conducted six focus groups to gain an in-depth insight into financial situations. Participants were granted anonymity.
Health insurance was seen as prohibitively expensive and many no longer had it. One group said the health system left them feeling vulnerable and somewhat resentful.
“Participants expressed an erosion of faith in it, particularly those who had experienced significant health issues in the last few years,” Gamble says.
There was a perception by some that they had lost financial support for their health issues, even though health was costing them more than it did when they were younger.
The report’s findings indicate Super really is regarded as super by the older set, helping stave off the kryptonite of rising food, petrol and housing prices, as well as easing concerns around healthcare certainty.
Superannuation is predicated on owning a home when the pension kicks in. That is a goal fewer and fewer are reaching, or are likely to, as house prices soar.
The after-tax NZ Super rate for couples (who both qualify) is based on 66% of the ‘average ordinary time wage’ after tax. That’s $712 a week. It costs New Zealand 5.1% of total GDP – more than is spent on education.
With the number of over-65s climbing, so too are the projected costs, which come largely from government revenue. In 2021/22 Super was budgeted at $17.691 billion, rising yearly to $18.930b, $19.976b, to $21.022b in 2024/25.
But Older People’s Voices indicates Super fills a crucial need, with recipients heavily reliant on it, and becoming more so.
“There are a number of dynamics at play that are causing concern to older people financially,” Gamble says.
KiwiSaver balances are too low to provide long-term security, investments and savings are performing poorly, and expenses are increasing from many directions, so savings are being eroded more swiftly.
Regaining a foot on the housing market later in life has become an increasingly remote prospect given significant rises in house valuations, Gamble says.
That has led to “substantial consequences” for the way older people live in retirement, with non-homeowners struggling to cover rent, without equity to support them.
“Cost-of-living increases in terms of food, petrol, and power are being felt by many participants, although at this stage they may be impacting more on ‘quality of life’ than ‘standard of living’ for most,” Gamble says.
“There is apprehension of the way it’s increasingly eating into savings.”
There is only so much that can be done to save money, so pensioners focus on unfixed costs.
“Food, petrol and power are within control, so those are most likely to be foregone.”
This includes doing without power/heating; not going out to save money on petrol; buying food in bulk or only on special.
Those living alone are disproportionately impacted because many of these expenses are not shared with others, made worse if they entered single life with few assets to begin with and no savings to draw on.
A survey of more than 1400 over-65-year-olds released in December found more than a quarter (27%) worked for pay. Most said they wanted to, yet 29% said they had to work for financial reasons.
In 1992 just 1.4% of the workforce was over 65. In 2002 it was 1.8%; 2012, 4.3%. This year it is projected to be 7.2%, or about one in 14. In a decade, one in 10 workers will be over 65, government figures indicate.
An increasing number of older people are also accessing the Ministry of Social Development accommodation supplement, which has burgeoned past $2 billion a year.
Irene Owen runs her crock pot in the lounge, because it’s warmer than the kitchen – “the coldest place in the house”.
She avoids using the oven as much as possible to cut extra power costs.
“If I don’t have to turn the oven on, that’s the biggest saving in my house,” says the 68-year-old New Plymouth pensioner, who finds that her benchtop electric frypan is more efficient.
For Owen, surviving on NZ Super is about thinking outside the box and planning ahead.
“I have a very strict shopping budget,” she says. “If it’s not on the shopping list, it doesn’t get bought.”
She buys in bulk when she can, runs a “very small car”, and insists on quality when buying items such as new shoes.
“I spend a little bit more on some things, which costs me a whole lot less in the long run.”
Owen shares some costs with her 91-year-old mother, who lives in her own home and is “on the pension too”.
“She’s got no car, I’m her car, so she pays for some of my running costs like half the petrol, half the rego, half the WOF, and half the insurance.”
Both pensioners prepare several days of meals at once so they’re not “cooking all the time”.
Owen’s also kept busy helping care for her grandchildren during the school holidays so her daughter can work full-time and save on childcare costs.
Her careful budgeting has been squeezed by recent increased costs of living, including rising petrol prices – which she attributes to Russian President Vladimir Putin’s invasion of Ukraine.
“I’ve noticed that everything’s gone up. The only things that haven’t gone up have been my haircuts, and my doctor visits.”
She’s been able to get by, although says she’s lucky to receive a disability allowance in addition to her Super due to cancer earlier in life that caused permanent heart damage.
“I still buy everything I want, and I still save a little bit of money. But as my daughter said, if I didn’t live in a Housing New Zealand unit, I’d be screwed.”
Note. The National Party and its partner Act want to raise the age of entitlement, and Act would slash and burn if they had there way. Be very, very cautious of these 2 parties.