2 Jul 2010

Kiwibank head calls for compulsory savings

9:59 pm on 2 July 2010

The head of Kiwibank says the Government should introduce compulsory savings to address the nation's massive deficit.

The state-owned bank launched its own low-cost KiwiSaver fund on Friday.

Chief executive Sam Knowles says the country needs to do more to address the growing savings shortage.

He says compulsory savings should be gradually increased to 10% of an employee's income, matched by the employer.

The chief executive of the Northern Employers and Manufacturers Association says however that compelling people to save that proportion of their income for retirement would be too costly for businesses and employees.

It would be over-saving for retirement, Alasdair Thompson says.

While many larger businesses are leaning more towards the idea of compulsory savings, he says, there needs to be a balance.