And many people who want and need to save more do not have enough spare money to do so.
These are among several findings in a new report done for the Financial Markets Authority (FMA).
It was carried out by the Australian-headquartered research firm FiftyFive5 and is the fourth bi-annual report in a series.
The survey sampled 2008 New Zealanders and was done in early July.
Overall, just under three-quarters were ‘quite satisfied’ or ‘very satisfied' with their provider in 2022, but this was down from 8 in 10 in 2020.
Lower returns on investments get most of the blame for the decline.
A further problem for KiwiSaver was people realising they were not saving enough for retirement but were not doing anything to fix it.
The most common response to discovering insufficient savings was a pledge to save more. But when it came to the crunch, only 20% were intending to do this, compared with almost 40% in 2020.
And around half of all current members said they did not have enough money to pay extra into their schemes, even if they wanted to. This was a bigger problem than it was two years ago.
“Affordability is a key barrier, as the top reason for not planning to increase contributions, is that people can’t afford to do so,” the report wrote.
Other reasons for not intending to increase contributions included prioritising paying off debts or loans, or preferring to save or invest more in areas outside KiwiSaver.
The report revealed more than three-quarters of KiwiSaver members were currently making regular contributions and almost 60% regarded this as a priority despite market volatility.
Non contributors blamed unemployment, lack of cash, or an irregular income for not paying into their scheme.
Overall membership of KiwiSaver schemes is up to 71%, an increase from 66% two years ago, and back to the level of four years ago, before the pandemic. Over 60% of KiwiSaver members were in a bank scheme, while 3% of KiwiSavers did not know who their provider was, down from 7% in 2020.
In other trends, there was a small increase in commitment to growth and balanced funds and a corresponding decrease in support for conservative funds.
One part of the report detailed the appeal of different classes of KiwiSaver providers. In this section, non-banks got higher marks than banks.
The report showed 79% of people in non-bank schemes were ‘quite satisfied’ or ‘very satisfied’, compared with 72% in bank schemes.
At the other end of the spectrum, 23% were ‘not that satisfied’ or ‘not at all satisfied” by their bank schemes. The equivalent figure for non-banks was 17%.
When asked for comments about their KiwiSaver providers, satisfied people gave several responses. One said, “I have found my provider to be honest and give great advice.” Another praised an “easy, no hassle investment that I can review with my other accounts online.”
Quotes by the dissatisfied referred to poor returns, poor customer service and high fees.
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