Millennials planning for retirement are taking a different approach to past generations and no longer have a 'she'll be right' attitude, the Financial Services Council says.
Retirement savings Photo: 123RF
The Financial Services Council asked more than 2000 people between the ages of 18 and 35 about how they would fund their retirement, what their retirement expectations were and their confidence in their futures.
The study shows that young people expect they will rely on KiwiSaver as their main source of retirement income and will not rely on owning a home or a superannuation fund, as previous generations have.
Only 54 percent of respondents expected to have their own home, and 30 percent expected to have New Zealand Superannuation at retirement.
Council chief executive Richard Klipin said young people also believed they would need more money during retirement than current generations.
The research showed a shift in the way younger generations were preparing for retirement, Mr Klipin said.
"It's clear that millennials are going to be Generation KiwiSaver. Owning a house and relying on New Zealand Superannuation are options younger New Zealanders simply aren't counting on.
"This is a significant change from previous generations where a 'she'll be right' attitude and owning a mortgage-free home was the extent of retirement planning for many," Mr Klipin said.
The minimum KiwiSaver contributions should be lifted in order to protect this generation, Mr Klipin said.
"An overwhelming number of under 35s want the law changed so that minimum contributions to KiwiSaver are lifted gradually. So there's a clear wake-up call for our politicians about the need to keep on strengthening KiwiSaver."
He said young people were also seeking better financial advice and hoped for more modern ways to access information, such as through online applications.
"The evolution of millennials into Generation KiwiSaver will bring a new set of challenges. However, I'm confident that with good planning, education, and regulation that we will be able to deliver financial security for younger New Zealanders into retirement."