Super age must rise - Retirement Commissioner

Retirement Commissioner Diane Maxwell stood by her recommendation to raise the age of eligibility for Superannuation to 67 in media interviews this week, saying the government needed to show courage for the sake of future generations.

"Under the current settings, no, we cannot afford NZ Super," said Maxwell. "It's currently costing $39 million a day, or $14.5 billion a year. In 20 years time that cost will triple to about $115 million a day."

She acknowledged that the economy would grow in that time, which would cover part of the increased cost. 

"But it won't cover all of it. We have to consider raising the age, reducing the amount paid, or reaching some form of means testing."

Maxwell said changes needed to include helping people prepare to work longer. Around 44% of New Zealanders already continued to work past 65, and that figure would keep rising. More needed to be done to help people in their 50s to upskill and retrain.

Wound into this was the declining rate of home ownership. Maxwell said Super was designed on the assumption that those reaching the age of eligibility were living in their own home mortgage free, but there was an increasing number of people reaching 65 either still paying a mortgage, or renting. 

"If you're relying on Super and also paying rent you're up against it. We're working on programmes to help people get onto home ownership pathways, but more needs to be done to provide affordable housing for our elderly in the future."

Both issues are being studied in CFFC's three yearly Review of Retirement Income Policies this year.