The New Zealand Bankers’ Association has today welcomed the Review of Retirement Income Policies discussion document released by the Commission for Financial Literacy and Retirement Income.
“The discussion document contains several practical recommendations that, if implemented, will help New Zealanders better prepare for retirement. This is especially important as we face an ageing population that’s living much longer than previous generations,” said New Zealand Bankers’ Association chief executive Kirk Hope.
The Association was pleased to see the Commission encourage greater KiwiSaver enrolment, better tax incentives for savings, and a review of New Zealand Superannuation.
“A mix of private and publicly funded retirement savings is a reality for us today. KiwiSaver has been very successful in getting people to start saving for a better retirement. Moves to get more people on board would benefit individual KiwiSavers and the country as a whole.
“The proposal to remove tax on bank deposit savings interest above the rate of inflation will encourage private savings across the board. It’s also good news for retired people who often rely on the income from their savings to make ends meet.
“We’d also welcome a review of New Zealand Super to keep it both fair and affordable as the population evolves.”
On the proposed review of voluntary annuities, Hope said it was important to investigate ways for people to spend their savings wisely in retirement.
“The discussion document sets a practical way forward. We look forward to seeing it put in place to help secure a brighter retirement for all New Zealanders,” added Hope.
A joint government and Auckland Council move today to make land available for 6000 new affordable houses in ten more special housing areas has been welcomed today by the New Zealand Bankers’ Association as a positive step in addressing the housing supply issue in Auckland.
“The big issue in the Auckland housing market is a lack of supply. Freeing up land for housing is a move in the right direction to help improve supply where it’s needed and alleviate pressure on house prices,” New Zealand Bankers’ Association chief executive Kirk Hope said.
“Credit growth is currently around 5.4%, which is not high. The availability of credit is not driving Auckland property prices – it’s the lack of supply. Today’s announcement is a constructive move to address the supply challenge.
“We have the opposite problem that parts of the United States and Ireland had a few years ago where an oversupply of housing contributed to a fall in property values resulting in negative equity for many home owners. That’s not the New Zealand experience.
“Addressing the supply issue may also reduce pressure on the Reserve Bank to use tools like low equity lending restrictions in an effort to maintain financial stability,” said Hope.
The New Zealand Bankers’ Association has urged prospective borrowers to talk to their bank as the Reserve Bank’s low equity lending restrictions come into force next week.
Under the Reserve Bank’s new rules which take effect on October 1, banks must limit new residential mortgage lending with loan-to-value ratios (LVR) over 80% to no more than 10% of the dollar value of their new housing lending flows.
The move comes on top of increased capital requirements for the high LVR housing portfolios of the four largest banks from September 30. The new rules have resulted in low equity premiums and higher interest rates for high LVR borrowers as banks work to meet the new requirements ahead of the deadline.
Referring to the new lending limits, New Zealand Bankers’ Association chief executive Kirk Hope said the goal posts had moved for low equity borrowers.
“It means people with a deposit of less than 20% will have reduced access to a mortgage. Households and small businesses may be declined loans because of the Reserve Bank’s lending restrictions.
“We suggest you talk to your bank about your individual needs and circumstances.
“Our banks are very competitive, and will continue to do all they can to meet the needs of their customers within the bounds of the Reserve Bank-imposed lending limits,” said Hope.
The Banker’s Association has been encouraging people to make a date with their money during money week.
New Zealand Bankers Association spokesman Kirk Hope said borrowers being forced into the unsecured lending market was always expected.
“It says it’s likely banks won’t even lend 10 percent, and it’s more likely to be 5 percent.”
The New Zealand Bankers’ Association today welcomed the first reading of the Credit Contracts and Financial Services Law Reform Bill, and cautioned further work was needed to meet the Bill’s aims.
“Quality regulation is well-targeted and properly enforced. That’s the outcome we’re looking for here,” said New Zealand Bankers’ Association chief executive Kirk Hope.
The Bill aims to reform the law around consumer credit contracts to encourage wider responsible lending and provide improved protection for vulnerable consumers.
“Banks are responsible lenders. We strongly support measures that target unscrupulous lenders and provide greater protection for vulnerable people. We’re keen to see all lenders held to the same standards we already observe.
“The law needs to strike a balance between protecting vulnerable consumers and ensuring legitimate and well-regulated lenders do not incur substantial additional compliance costs.
“The Credit Contracts and Financial Services Law Reform Bill presents an opportunity to get this balance right. We look forward to engaging in the legislative process to achieve that balance, and we congratulate Minister Foss on progressing the Bill,” Hope said.
Make a date with your money
30.08.2013
The New Zealand Bankers’ Association is encouraging people to make a date with their money during Money Week, which runs from 1 to 7 September.
“The idea is to set aside some time to take stock of your financial situation and make a plan for the future,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“Personal money management and financial goals often end up as lower priorities in our busy lives, where work and family pressures can take precedence. If you can sort yourself out financially, or at least know where you’re going with your money, it can often alleviate pressures in other areas of your life.
“Most people think about their personal finances when faced with big life events such as leaving home, going studying, buying a house, starting work, getting married, or retiring. Money Week provides an opportunity to take the plunge now.
“If you’re looking for some professional advice about managing your money, your bank is a good place to start.
“Our banks are right behind improving financial literacy. It’s all about people making informed choices to improve their financial well-being. That’s good for banks, and good for their customers.”
The Commission for Financial Literacy and Retirement Income’s 2013 Financial Knowledge and Behaviour Survey revealed that banks are New Zealanders’ main source of financial advice. Family and friends are the second most popular source of financial advice, with financial advisers coming well down the list.
“While you’re likely to trust family and friends, they may not be best placed to advise on financial matters. Seeking professional advice makes sense for the most significant financial decisions of our lives,” Hope said.
The New Zealand Bankers’ Association has congratulated the government on two positive moves in the area of business regulation. Today a unique New Zealand Business Number is being rolled out, and earlier this week the Financial Markets Conduct Act passed.
“A single reference number for all New Zealand companies will help businesses easily identify themselves to government agencies and other businesses. This is particularly useful for electronic transactions. It will also reduce business costs and provide certainty to those dealing with businesses,” said New Zealand Bankers’ Association regulatory director Karen Scott-Howman.
“The passage of the Financial Markets Conduct Act is an historic moment and represents a significant milestone. The new law brings our securities regulation up to date and will do much to strengthen our capital markets.
“It will give investors increased confidence in their ability to participate in the financial sector.
“These two milestones show the government’s commitment to its Business Growth Agenda, which aims to drive business growth and create a more productive and competitive economy,” Scott-Howman said.
New Zealand Bankers’ Association chief executive Kirk Hope said people should be aware they may be declined loans because of the new restrictions and advised people to talk to their bank about individual needs and circumstances.