More than a quarter of people (28 per cent) aren’t confident they’ll pay off their mortgage before they retire, new research shows.
BNZ’s Financial Futures research, which surveyed 2,000 people in March, also revealed that nearly half (45 per cent) expected to fund their mortgage repayments once they retire through their pension, compared with selling their house and buying a cheaper one (37 per cent) and through savings (31 per cent).
BNZ’s Director of Retail and Marketing Paul Carter says in a press release: “We are still benefiting from some of the lowest interest rates in a generation, so now is the best time to look at your repayments to see how you can speed up saying goodbye to your mortgage.”
Carter says even simple things, such changing from monthly to fortnightly payments, will reduce the length, “without your feeling the pinch”.
The study found that 57 per cent planned on using their superannuation (either from their company or KiwiSaver) to fund the lifestyle people want during retirement. Another 49 per cent planned on working either full time or part time past the pension age.
Carter says: “I recommend people start with doing what they can to get on top of their debts, give their mortgage repayments the once-over, and check to ensure their KiwiSaver is working hard for them.
“Having your finances in a good state so you can make a choice to work in later life means not being complacent now,” he says.
“KiwiSaver is such an important component of people’s plans for funding retirement – so make sure you not only enrol in KiwiSaver, but make an active fund choice, and take an interest in the fund where you are invested,” Carter says.
When it came to spending, three-quarters (75 per cent) of respondents say they wanted to spend money on travel or holidays during their retirement.
Next most popular, on 61 per cent, was spending money on grandchildren and other family members.
First published 18 April 2018
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