News | Features
18 Jun 2021 23:14
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • Sport
  • Weather
  • Finance
  • Shopping
  • Jobs
  • Horoscopes
  • Lotto Results
  • Photo Gallery
  • Site Gallery
  • TVNow
  • Dating
  • SearchNZ
  • NZSearch
  • RugbyLeague
  • Make Home
  • About NZCity
  • Contact NZCity
  • Your Privacy
  • Advertising
  • Login
  • Join for Free

  •   Home > News > Business > Features

    Retirement Payments Likely To Make A Comeback

    Annuities – which are typically monthly payments to retired people, over and above NZ Super – may be on their way back onto the New Zealand scene.

    Ten or 15 years ago, more than half a dozen companies offered annuities, but currently only Fidelity Life does. Other providers dropped out, probably because our tax system and related issues don’t favour annuities, so there were too few takers.

    But with KiwiSaver leading to more New Zealanders retiring with considerable savings, the government seems to be taking new interest in annuities.

    Retirement spending "is the next stage of policy thinking and policy work," Finance Minister Michael Cullen told members of the Association of Superannuation Funds of New Zealand at their recent conference. "The annuities market in New Zealand is pretty underdeveloped by international standards. But we’ve got time to think the thing through. Nobody is retiring on KiwiSaver for the next four years."

    Said National’s finance spokesman, Bill English, "There should be more of a demand for annuities. That seems to be the next logical step in the kinds of savings policies developed in the last few years."

    If you buy an annuity, you give a lump sum to an insurance company in exchange for regular payments for the rest of your life – and perhaps also your spouse’s life.

    Some annuities pay steadily increasing amounts, to take inflation into account. And some include a guarantee that if you die within, say, ten years of purchase, payments will continue to your estate until the ten years is up. Nevertheless, those who live for many years get the best deal.

    Provided whatever government we have over the next few years makes annuities more attractive, they are likely to prove popular. Having a guarantee that you won’t outlive your savings is an excellent use of part of your nest egg.

    Cullen also told the conference his government is not planning to increase the NZ Super age beyond 65. "People need stability". Nor is it looking to make KiwiSaver compulsory. "We’re going to achieve our ambitions with a voluntary scheme."

    He acknowledged there have been problems with the payment of KiwiSaver funds to people’s estates, after they die. Officials and industry experts are discussing a solution, he said. "It’s not something we should rush."

    English said National plans to announce its KiwiSaver policy as part of its tax package, "after Treasury opens the books," in the next few weeks. He added that "it’s well worth running up an overdraft to join KiwiSaver," but said it is "an expensive scheme for the government".

    He also said National wants to create "vehicles to allow New Zealanders to invest in infrastructure, through bonds or equity." Such products would provide much-needed long-term investments for managed funds, English added.

    Random House, publishers of my new little black book "KiwiSaver Max: How to get the best out of it", have made 20 copies available to readers of this column.
    For information on the book, which includes tips on getting more from KiwiSaver and the results of an extensive survey of 31 providers, see

    The book answers many readers’ questions about KiwiSaver.

    To enter the competition for a copy, write in 50 or fewer words what you think of KiwiSaver – good, bad or both. Be practical, pathetic, poetic, political – anything but boring. Entries of more than 50 words will be disqualified. Some of the winning entries will be published in this column.

    Email your entry, with "Investor column giveaway" in the subject line, to by Monday September 22. Please include your name and street address (not box number).

    © 2021 Mary Holm, NZCity

     Other Features News
     10 Sep: Spring clean your finances
     13 Aug: Plan ahead to give yourself a debt-free Christmas!
     10 Jul: Wise up to clear credit card debt
     07 May: Ways to prepare for the unexpected
     30 Mar: Time for a financial progress check
     10 Feb: Studying up on NZ Super
     10 Jan: Managing the back-to-school bills
     Top Stories

    Disappointment from Taranaki head coach Neil Barnes, that loose forward Lachlan Boshier has been let go by New Zealand Rugby More...

    The Auckland Tuatara will miss a second straight Australian Baseball League season, citing ongoing uncertainty around Covid-19 More...

     Today's News

    Rugby League:
    Adam Pompey has bounced Rocco Berry out of the Warriors side to play the Knights tomorrow 21:56

    Kanye West "likes spending time" with Irina Shayk and is happy to enjoy things as they progress 21:41

    Law and Order:
    Police say they'll be reviewing their footage from a major gang member's funeral...and following up any infringements 21:16

    Dwayne Johnson has topped PEOPLE magazine's list of 100 Reasons to Love America 21:11

    Taliban taking back territory as Australian and US forces prepare to leave Afghanistan by September 21:06

    Cheryl eats a meat-free diet three or four days a week 20:41

    Kelsey Grammer has teased "some things will be different" with the 'Frasier' reboot 20:11

    Sharna Burgess definitely wants to have children 19:41

    Victoria's Secret signs Megan Rapinoe and Priyanka Chopra Jonas in brand makeover bid 19:36

    Reese Witherspoon had panic attacks "for weeks" before filming 'Wild' 19:11

     News Search

    Power Search

    © 2021 New Zealand City Ltd