How are GP members coping on New Zealand Super? Part 2

BY DAVID MARSHALL - Retirement Income & Taxation NAG Chair

In our last issue we discussed the June online survey of over 2,800 members to assess the adequacy of NZ Super. In Part 2 we focus on survey results related to accommodation including downsizing and reverse mortgages, key ideas to improve NZS, and our commitment to volunteer work.

In Part 1 we focused on how those on NZS perceived their ability to financially cope with life in retirement on NZS – both now, and in the future. While most were coping currently, 16 percent were coping poorly, or just not coping. However, looking into the situation in 10 years’ time 44 percent said they were worried or very worried about their financial situation.

David Marshall

The reason for greater pessimism in the future was that while 17 percent managed to survive on NZS alone, another 2/3 of members were having to supplement their NZS by up to $20,000 per year, with some drawing down even more to manage their financial situations.

However, reserves were low. More than 50 percent of responders have less than $50,000 in reserves – just 18 percent had reserves exceeding $250,000.

Since our last article, the Massey University – NZ Retirement Income Expenditure Guidelines were published for 2022.

For a no-frills lifestyle, a range of $77,000-$277,000 was required as lump sum savings, depending on provincial vs metro living, and a single vs couple retirees. (Single Metro retirees required the highest nest-egg).

For a retirement with choices savings needed to be between $480,000 and $755,000. Clearly the majority of our retirees do not have these financial resources!

The living expenses that most were struggling with were energy costs and rates, while for those in rental accommodation rent, food, energy and transport costs were the most challenging.

In Part 2 we focus on survey results related to Accommodation including downsizing and reverse mortgages, key ideas to improve NZS, and our commitment to volunteer work.

Accommodation Issues

70 percent of respondents were living in a mortgage-free home, with another percent still paying off a mortgage in retirement. Just 11 percent were in a retirement village and under 8 percent rented.

In Australia the Government has a Reverse Mortgage Scheme that allows retirees to draw down up to $10,000 annually to supplement their income.

Only 15 percent of our respondents were interested or very interested in the availability of such a scheme in New Zealand. 39 percent were not at all interested.

While this could be a way in which those retirees with their own mortgage-free home struggling to survive on NZS alone could supplement their income, there is still considerable doubt about going down the path of reverse mortgages.

42 percent of those with a mortgage-free home were interested in downsizing in the next five-to-10 years.

However, there were significant perceived barriers to achieving this goal. Particularly the lack of suitable housing in their own community, followed by financial barriers to downsizing and/or subdivision of their sections.

Banks are not prepared to make even short term bridging finance available to those who have NZS as their predominant income, regardless of the value of their current home. This is trapping some older retirees in larger homes which they can no longer afford to maintain, despite their desire to downsize and free up their homes for younger families.

How could NZS be improved?

In a free text section respondents were able to comment on how the Government could improve NZS, or associated benefits, to ensure that retirees in the future are protected from poverty and can live the rest of their lives in dignity.

Not surprisingly 45 percent wanted an increase in NZS. Most did not stipulate how much, but a number felt that the minimum wage or a Living Wage should be the basis for NZS.

Interestingly a high percentage of those seeking an increase in NZS, wanted the annual increases to meet the rise in inflation and/or rise in the average wage.

Current legislation ensures that NZS is annually adjusted by the rate of inflation, or the increase in the average wage – whichever is higher. This explains why NZS was increased by 6 percent in April to match the increase in the CPI in 2021, which exceeded the rise in the rate of the average wage.

Free or subsidised medical and dental care was rated as important by many of the 2157 respondents, followed by rent/accommodation support increases.

Cutting either GST – especially on food items, tax on investments, and tax on NZS were all floated as being helpful. 6percent were satisfied with the status quo!


Volunteering saves the economy an enormous amount – estimated to be over $4 billion per annum (Volunteering NZ based on 2021 Labour Market statistics.)

While approximately 21.5 percent of New Zealanders are estimated to undertake volunteer service, it is clear that amongst retirees the rate of volunteering is higher.

In our survey over 38 percent said that they currently worked as a volunteer – so our retirees are significant contributors to the $4 billion of savings to our economy each year.

While 75 percent volunteer up to 8hrs/week, 25 percent volunteer in excess of 8 hours per week.

READ: How are GP members coping on New Zealand Super? Part 1

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