NZ Super was designed with the assumption that most people will own their home and be mortgage-free by the time they retire. That’s increasingly not the case.
This article was first published in Bernard Hickey’s newsletter The Kākā.
Retirement commissioner Jane Wrightson published her three-yearly retirement policy review yesterday with a warning that the number of retirees renting is likely to double to 600,000 by 2048, and that an increasing number of both renters and those with mortgages are spending more than half their pensions on rent and borrowing costs.
This challenges the entire basis of New Zealand’s universally available and non-means-tested superannuation system, which is based on providing enough income to live well – but only with the assumption that the retiree owns their own home.