Kiwisaver members are being urged to take a closer look at their investment options after the latest report on the retirement scheme shows nearly half are invested in conservative funds.
The Financial Markets Authority's annual report shows more than two million people have Kiwisaver funds under management, valued at nearly $13 billion.
Membership increased by 14% in the year to March, with nearly a quarter of members in default schemes and 47% of all funds are conservative investment funds
FMA chief executive Sean Hughes says there is nothing wrong with default schemes, but they may not be suitable for everyone.
He says younger people, other than those using KiwiSaver to save for their first home, can in general afford to take a little more risk with the aim of more long-term growth.
Fisher Funds chief executive Carmel Fisher says people who stay in conservative funds rather than switching to growth funds risk could miss out on substantial retirement savings.
"The difference in returns for somebody invested in conservative versus growth assets will be quite significant, and it will mount up and it will therefore make quite a big difference to people's retirement lifestyles," she says.
The report says KiwiSaver providers charged a total of $129 million in fees, while $90 million was paid in tax.
http://www.radionz.co.nz/national/programmes/checkpoint/audio/2536334/kiwisaver-members-urged-to-check-if-they%27re-in-the-right-scheme.asx Listen to Sean Hughes on Checkpoint