Keep NZ Super age at 65, Retirement Commissioner says

Retirement Commissioner Jane Wrightson says New Zealanders are not wealthy enough to cope with a higher pension age.

Her predecessors Diane Maxwell and Diana Crossan recommended the age at which people get the universal state pension should rise from 65 to 67.

But Wrightson said 40% of people aged 65 and over had virtually no income besides NZ Super, and another 20% had only a little more.

‘‘Even with NZ Super, close to one in three people don’t think they will have enough for retirement unless they continue working past 65,’’ she said.

And, she warned: ‘‘Any increase to the age of people accessing NZ Super will only further disadvantage women, Māori, and Pacific people.’’

The purpose of the retirement system was to enable older people to live with dignity and mana and contribute to community and whānau in later life, Wrightson said.

‘‘It is clear to me that the age of eligibility to access NZ Super must remain the same, or a more complicated system be considered to reduce the inevitable inequity such a change would bring.’’

Already there were signs of growing hardship among over65s, said Natalie Vincent, chief executive of the Ngā Tāngata Microfinance not-for-profit loans scheme.

There was an increase in over65s in financial distress applying for Ngā Tāngata’s ‘‘last resort’’ loans to help them pay off highinterest loans, Vincent said.

Last year, 22% of applicants were over the age of 65, she said. ‘‘This year, it’s increased to 28%,’’ she said, and half of applications for its no-interest loans to purchase essential household items like washing machines were now from over-65s.

‘‘We believe this reflects cost of living increases,’’ Vincent said.

Many over-65s had no way of increasing their low incomes, and many were turning to buy now, pay later loans to buy essentials, she said. Women, Māori and Pacific people were overrepresented in applications for Ngā Tāngata loans, she said.

Most applicants were renters, including in social housing, and were paying 40% to 50% of their NZ Super on rent, she said.

Wrightson’s predecessors had called to lift the age of eligibility to combat the rising cost to the taxpayer of funding NZ Super, which is forecast to rise to 6.4% of GDP by 2061 from about 4% today.

‘‘We hear a lot about the cost of NZ Super but very, very little about its value,’’ Wrightson said.

The unpaid work done by older people, including voluntary work and raising grandchildren, had been valued at $15 billion a year, she said.

Every three years, Te Ara Ahunga Ora The Retirement Commission makes retirement policy recommendations to government, and this time the Government asked for special attention to be paid to the retirements of Māori, Pacific people and women.