Innovation a necessity

Stewart said innovation was essential, but warned it was not easy or glamorous.

“Some may consider (innovating) to be cool and exciting and fun. It’s not. It’s very hard, it’s very expensive, and it’s very difficult.

“We bring innovation to the decumulation space simply because the problem is so complex and conventional answers won’t fix it.”

Joel Atputharaj, Russell Investments’ Director of Retirement Strategy for Australia and New Zealand, said Australia was creating decumulation solutions on the run while the retirement wave was already there.

“If I were going to use a surfing analogy, New Zealand has this opportunity to start paddling now, creating the retirement solutions, lifting retirement literacy ahead of the wave as it comes.”

But he cautioned: “Retirement is not just about the product. Retirement is about the broader solution. It’s the ecosystem of tools, help, guidance, advice and support sitting around the product.”

Atputharaj described seeking full financial advice as the “gold standard” if it can be afforded.  However, for many this wasn’t the case, and so there needed to be thought given as to how to service “very different members en masse”.

Overcoming nervousness

One of the biggest barriers, Stewart said, is retirees’ reluctance to draw on their capital to generate an income.

“So giving people the confidence, demonstrating that we have an environment that’s safe for them, and they can have the trust in us to manage a pension for 30 years is fundamental.

“You’ve got to find a way to deliver a message that engenders trust but is not complex. In the last couple of years, people are more inclined to have that conversation. They get into the stage where the gap between NZ Super and what they have, in terms of a lifestyle, is just too wide.”

With about 22,000 customers, Stewart said Lifetime was not yet “touching the sides” of the people it could help.

“If in five years we were providing 100,000 people a retirement income supplement every fortnight derived from either their capital or their equity in their home, that would be fabulous.”

A market rated ‘C’

Retirement Commissioner David Boyle gave New Zealand’s overall retirement readiness a ‘B-’, thanks to NZ Super and KiwiSaver, but rated the decumulation market just a “C or C-”.

“There’s not enough advice out there to support those New Zealanders coming through over the next 15 years, when 900,000 Kiwis will be reaching the age of 65.”

The number of renters aged 65 and over is also expected to reach around 600,000 by 2048, Boyle said, and only around 28% of New Zealanders aged 55 to 64 have a good idea of the income they will need in retirement.

“I think we can do a lot better in that space,” Boyle said.

Public Trust General Manager of Corporate Trustee Services David Callanan said New Zealand had done well getting people saving, particularly through KiwiSaver, and the next step was “helping people turn those savings into confidence, independence, and a reliable quality of life once they retire.”


The advice here is general and does not constitute specific advice to any person. 

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