BUY­ING A HOUSE AT 21

Woman turns ta­bles on hous­ing cri­sis by good sav­ings - and Ki­wiSaver.

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We’ve al­ways been sen­si­ble with money, don’t smoke or drink or need any of the flash things. -Abi­gailPi­cott

At 21 – and with just four years of work­ing life be­hind her – Abi­gail Pi­cott has thumbed her nose at the so-called hous­ing cri­sis by buy­ing her first home. “I left school at 17 and started full-time work in re­tail man­age­ment,” she says. “I haven’t stud­ied but have been very care­ful with money and now have a fam­ily home.”

Pi­cott - who uses ASB as her Ki­wiSaver provider - is one of over 30,000 peo­ple helped into their first home us­ing Ki­wiSaver sav­ings in the year to the end of March.

She firmly be­lieves it is time to change her gen­er­a­tion’s mind- set from ‘ I want, I will have’ and be pre­pared to put in the hard yards to get what they want.

Pi­cott, who now works as a concierge, has pur­chased a home in Up­per Hutt near Welling­ton to­gether with her part­ner Sheri­dan Cullen. The pair came up with a de­posit of over $40,000 - with­draw­ing a com­bined $26,000 from their Ki­wiSaver ac­counts - for the $430,000 prop­erty.

They move in on Oc­to­ber 28, and Pi­cott says it would not have been pos­si­ble with­out the con­tri­bu­tion through Ki­wiSaver.

“I have been in Ki­wiSaver for four years and Sheri­dan three, and we were able to with­draw the $26,000 be­tween us to go to­wards the de­posit; there is no way we could have bought the house with­out it.

Pi­cott, who is English, moved to New Zealand with her par­ents when aged 12: “They came here to give me more op­por­tu­ni­ties; New Zealand is the about the same size as the UK, but with a pop­u­la­tion of less than five mil­lion com­pared to 65 mil­lion, the op­por­tu­ni­ties are very dif­fer­ent and it has turned out to be a smart de­ci­sion.”

Pi­cott says she and Cullen - he is a builder with a six-year-old son - have al­ways put ex­tra money aside for a house.

“He is a nat­u­ral saver and has been a fan­tas­tic in­flu­ence on me,” she says. “We’ve al­ways been sen­si­ble with money, don’t smoke or drink or need any of the flash things; I have no other loans other than the mort­gage, don’t use credit cards and we live within our means.”

Pi­cott says the cou­ple had amassed $11,000 in per­sonal sav­ings but it was their Ki­wiSaver sav­ings that made the dif­fer­ence.

“Ini­tially I was con­tribut­ing three per cent but in­creased it to eight per cent for about a year. I’ll go back to con­tribut­ing three per cent now and start sav­ing for re­tire­ment,” she says.

“When I first joined I was un­aware of what it was,” she says. “But the ASB were very help­ful and took me through all the ins and out of the scheme. I would rec­om­mend any­one to go and talk to their provider and get them to show how they can reach their goals.”

Pi­cott says they were not ac­tively look­ing for a prop­erty; “we were sort of win­dow-shop­ping but as soon as we saw it we de­cided we wanted it – I got quite emo­tion­ally at­tached very quickly.”

Ai­dan Vince, ASB Bank’s head of Ki­wiSaver and Out­bound Ad­vi­sory, says Pi­cott has ob­vi­ously latched on to the power of Ki­wiSaver.

“Al­though it was built for peo­ple to save for re­tire­ment, early with­drawal to buy a first home is also one of the key ad­van­tages,” he says. “Ki­wiSaver has helped around 24,000 ASB cus­tomers buy their first home and I think it is safe to say this dream would have been fur­ther away for many of them with­out the ben­e­fits it pro­vides.

He says peo­ple can use money for their first home if they have been a Ki­wiSaver mem­ber for at least three years, al­though are re­quired to leave a bal­ance of $1,000 after with­drawal.

Vince says it is im­por­tant peo­ple con­tinue with Ki­wiSaver once into their home: “There is this temp­ta­tion to stop pay­ing in be­cause now they have this big scary mort­gage they think they can no longer af­ford the con­tri­bu­tions.

“De­pend­ing on your em­ploy­ment con­tract this could ef­fec­tively be giv­ing your­self a pay cut be­cause you lose your em­ployer con­tri­bu­tion as well. Al­though in your 20s and 30s re­tire­ment may seem a long way off, none of us are bul­let proof and the day will come when it be­comes a re­al­ity.”

Vince says re­gard­less of your provider, there are a few key things any­one sav­ing for a first home should do with Ki­wiSaver.

“Check what fund type you are in as less growth-fo­cused funds are im­por­tant as you are get­ting ready to with­draw,” he says. “This en­sures fewer ups and downs in your bal­ance.

“But I would also rec­om­mend shift­ing back to a growth fo­cus after you buy as your in­vest­ment hori­zon will now be longer; and ad­vise look­ing at your con­tri­bu­tion – be­fore and after you buy – as ev­ery lit­tle bit helps.”

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