NZ a winner for retirees but not so good for kids
If you are looking to retire, head to Scandinavia. Failing that, New Zealand is a better choice than Australia, according to a study by a global fund manager.
New Zealand just pips Australia to be in fifth place in a global ranking of welfare in retirement of 43 countries, with Sweden in fourth place.
Norway has taken the top spot, followed by Switzerland and then Iceland.
The study by Natixis Global Asset Management is based on more factors than retiree finances alone. It scores countries on indicators including finances, material wellbeing, quality of life and health.
It also rates the performance of each economy and then combines scores to produce an overall ranking.
Nataxis’ Australia managing director, Kevin Haran, said that although both Australia and New Zealand do very well, they could do better in the material wellbeing category.
‘‘This can be boiled down to income equality. The Nordics have a lot greater income equality than ourselves,’’ he said.
‘‘We are a rich nation, but we are drifting towards being less evenly spread,’’ Haran said about Australia.
New Zealand scores highly in quality of life measures such as air quality and happiness.
But Jessica Berentson-Shaw, head of research at the Morgan Foundation, said that although most New Zealand retirees had a good quality of life, the same could not be said for the younger generations.
She said New Zealand had decided to support older people with superannuation, recognising that they were economically vulnerable.
Other policy decisions had also left the current generation of retirees better off.
Housing costs had been lower for them through most of their lives, she said. ‘‘We invested early on in a lot of state and social housing. We took it away but housing costs remained low for quite a long period of time for this group.’’
Many had been able to get into their own homes and pay them off before they reached 65. A significant number had been able to invest in other housing, too. ‘‘Free tertiary education helped as well. And wages weren’t as static as they have been … Accommodation costs relative to wages were reasonable and they could put aside other savings.’’
She said New Zealand did well internationally in terms of how older people were treated but poorly when it came to children.
‘‘That’s a distinct policy choice. We’ve recognised the economic vulnerability of being older but not the vulnerability of being a baby.’’
Future generations might struggle, Berentson-Shaw said.
‘‘There’s a generation or two of people coming through that doesn’t have the benefit of being able to rely on their houses.’’ –with Sydney Morning Herald