PROJECT M
 
PROJECT M
Diana Crossan

The Kiwi guide to saving is a mouse

New Zealand has a reputation for impressive and untouched nature, but it is also one of the most financially literate countries. Retirement Commissioner Diana Crossan unveils some of the secrets to the nation’s success

The Kiwi guide to saving is a mouse

New Zealand has a reputation for impressive and untouched nature, but it is also one of the most financially literate countries. Retirement Commissioner Diana Crossan unveils some of the secrets to the nation’s success


PROJECT M

Diana, New Zealand is one of the most financially literate countries worldwide, according to a global study. What is your secret?

Diana Crossan

New Zealand provides retirees with a limited state pension. Additional retirement income largely comes from private savings, so workers need to have an understanding of financial matters. To educate the broad population, the Commission for Financial Literacy and Retirement Income initiated www.sorted.org.nz and its finance-savvy mouse to boost financial literacy in all population segments. The focus is not only retirement but rather lifetime savings. And I am still convinced that this is the best financial information website worldwide. Ten years after it was first built, the Commission completely rebuilt sorted.org.nz and relaunched it in March 2012. Information is presented in a way that’s much easier for people to find. Users have four direct routes to the information on the website: active planners who want to use the calculators can go straight there. People who know what information they’re looking for can find it in the A-Z Guides. Information is presented in the context of life events, such as having a baby or starting a first job. And people who need additional guidance are offered a new framework that the Commission has developed: Think, shrink and grow.

PROJECT M

While the Internet is the go-to resource for information today, do you use any other channels?

Diana Crossan

It was quite a radical move in 1999/2000 when we launched the site. But we also produce booklets and offer seminars for people who prefer face-to-face contact.

PROJECT M

Retirement can be a rather theoretical topic. How do you promote financial literacy?

Diana Crossan

We offer a broad range of calculators for mortgages, student loans and others. In addition, we have offered very pragmatic information, such as “10 questions to ask your financial advisor” or “8 tips on investment.” We’ve also featured Kiwi Stories, where we present the financial history of regular citizens. The site is designed for all New Zealanders, irrespective of their particular financial situation.

PROJECT M

How do you measure the site’s impact?

Diana Crossan

Two surveys in 2006 and 2009 showed an increase in financial literacy in most of the population. I assume the financial crisis has done its share to increase awareness, but we address people actively coordinated with certain dates in the financial calendar, for example when the Official Cash Rate, the interest rate set by the Reserve Bank, is adjusted.

PROJECT M

Do you see an interest from other countries?

Diana Crossan

We cooperate closely with Australia and the Organization for Economic Cooperation and Development OECD. As a result, I have close working relations with governments in Egypt, Singapore and Brazil.

PROJECT M

You recently suggested to increase the retirement age from 65 to 67. Where else do you see room to improve New Zealand’s pension system?

Diana Crossan

In 2007 New Zealand introduced a new, individualized retirement savings scheme called KiwiSaver. From July 2012, the first KiwiSaver members to reach 65 will have access to their funds. At the moment the balances are not large, but there are risks in paying out lump sums rather than annuities and we will have to think about the best way to approach this.

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