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Summer KiwiSaver's Martin Hawes says the future has never been easy to read and its much tougher now, but the changes can be played to advantage. Don't discard goals and plans, adapt. A post-covid world will still have plenty going for it

Summer KiwiSaver's Martin Hawes says the future has never been easy to read and its much tougher now, but the changes can be played to advantage. Don't discard goals and plans, adapt. A post-covid world will still have plenty going for it

By Martin Hawes*

Looking back, New Year seems a long time ago. So much has happened since we last celebrated a New Year but, in just a tad more than three months, we now seem to be living in a different world.

If you made goals or plans back in the New Year, they are probably in tatters – maybe you planned to sell the business to retire (not possible now), buy a rental property (probably not wise at the moment) or contribute more to KiwiSaver (a good idea, but not possible if you have lost income). Not many of us are still going about our lives in any “normal” kind of way and what we thought we might be doing in April would be quite different to what we are actually doing.

Whether it is a closed business, a reduction in salary or redundancy, there are now many people on much reduced income. In fact, those plans that were so positive during the holidays, have now turned into plans for survival.

It is when we look back that we see how far we have come. And, looking back, we may get an idea of how far we are going. If we can come so far in the last few months, we can travel just as far in the next few months. In fact, the next few months, the pace of change in some areas may have increased further.

If you start to look ahead you may see opportunities – and plans that were done three months ago can be reset to meet those opportunities.

Crises always present opportunities. The opportunities will be plenty and at multiple levels. People can sit back and try to find their place of comfort, but there is also a place for discomfort which involves taking opportunities and a new path.

Having tried some things during this crisis, many may not want to go back to doing what they had done before. Some people like working from home and find it more efficient and productive. Some people will have lost a job and will say “good riddance” to that old job to strike out to something new and attractive. Yet others have been astonished at how little money they can live on in lockdown and may use that experience to save more.

Those New Year plans can be reset for something just as good or, maybe, better.

Of course, great change brings investment opportunities whether that is for a private portfolio or for a KiwiSaver fund. COVID and all that has gone with it has accelerated trends that were already gently in play: e-health, automation, on-line schooling, internet entertainment, contactless payments, and working from home are all trends that were in play before COVID but which have now accelerated.

Social mores and the way we live will change: chances are we will want to continue a physical distance between ourselves and strangers for a time even after the virus has gone. We probably will not want to travel as much and many of us will be relieved to substitute Microsoft Teams or Zoom for another business flight. Working from home could relax the way we dress even further, bad news for clothing businesses who sell “business” clothes and not track pants, perhaps.  

Of course, the change that everyone will be thinking about is property. Immigration has stopped and there may well be political agitation to keep it down to try to protect jobs. That would be very bad for house values despite low interest rates. In any event, house prices are likely to be under pressure from lower incomes and, for first home buyers, depleted savings. I suspect that house price movements will depend on region – some areas will be hit much harder than others.

The future is never easy to read but many of these can be played to your advantage. There are already new opportunities and your old goals and plans do not have to be discarded - they may need adapted and they be slower to fulfil, but a post-covid world will have plenty going for it.

Martin Hawes is conducting webinars on big investment trends this week. To register:

*Martin Hawes is the Chair of the Summer Investment Committee. The Summer KiwiSaver Scheme is managed by Forsyth Barr Investment Management Ltd and a Product Disclosure statement is available on request. Martin is an Authorised Financial Adviser and a Disclosure Statements is available on request and free of charge at This article is general in nature and not personalised advice. Summer competes with banks and other KiwiSaver providers.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Thanks Martin, but I set my goals with just this kind of inevitable event in mind.


Good call, powerdownkiwi!!

Hi Martin - any thoughts on how far prices could fall from optimistic and pessimistic points of view?

Optimists say we have seen the sharemarket bottom. Pessimists (including me) think there are further wave(s) of selling to come. It was down 38% at one stage a couple of weeks ago - we may yet retest that low!

I guess that makes me an optimist Martin. Loser's shout?

Good comment. I just hope you are acting on your view?

Not one single Financial Planner that my clients have, nor the one’s my partners have, did anything in January or February to suggest maybe "Get out of Dodge" (i.e. sell!). They are useless extra’s in a C grade movie. None of the Industry Funds said anything to anyone that "maybe the market was a bit frothy & overpriced". They said & did absolutely nothing. Just played along grabbing their fat commissions & fees & plundered the punters. They crow how good they are on the way up & then just say "oh well markets go up & down & they'll bounce back to where they were" Their business model is a Ponzi Scheme & they play it for all it is worth. None of them had a clue leading up to Xmas & January.

(From a comment on another site)

Quite right. The NZ sharemarket has recovered better than my NZ Equities fund. The NZ sharemarket is just an average. My fund is carefully selected, cunningly bought and sold to maximise my gains and minimise my losses, and does worse. Frankly with hindsight, I could do better, if I could be bothered, buying and selling the business page headlines.

Cheers Martin, albeit as different professionals. Able to exacting all the moves by govt & RBNZ, zero exposure to this current saga, enjoyed all your column keep up the good up to date info./kiwisaver for us.

We were talking about our opportunities on the other side last week as it happens. Some we still cannot see, but they'll be there if we keep looking. We've learned we need to be a bit more multi-faceted, as the virus has exposed our singular nature. We'll certainly need to up our digital game so that'll be item 1. My old boss told me many years ago now, there's always opportunity in change.

A clear signal yesterday given by RBNZ for NZ F.I.RE economy - following every steps of my advises, this is opportunity of the life time for Kiwis to 'invest' more in private properties (airBnB listing), commercial (ex.lock down rentals) - PM has guaranteed that no one shall sell their house just because loosing their jobs. The banks are all line up ready with the news of LVR & FHB deposit removal, the NZ rental yields income has been govt. guaranteed by initial wages subsidy & more to come. As been advised? Spend spend spend on those RE now.

Hi Martin,
We've been hearing a lot about deflation and quantitive easing in resent times. Both appear to have opposite effects on cash in the bank. What are your thoughts?

Early withdrawal of KiwiSaver funds under COVID-19

KiwiSaver is a voluntary, work-based savings scheme, designed to help people prepare for their retirement. The primary legislative objectives of KiwiSaver are to:

• encourage a long-term savings habit and asset accumulation by individuals,
• increase individuals’ well-being and financial independence, particularly in retirement.

The policy drivers for the implementation of KiwiSaver were the perceived low levels of private saving for retirement and a concern that middle-income New Zealanders, in particular, were at risk of experiencing a substantial drop in their living standards during retirement.

However, an IRD study into KiwiSaver, found evidence to suggest that KiwiSaver has not been successful in improving the accumulation of net wealth for its members and that KiwiSaver members actually accumulated less wealth compared to non-KiwiSaver members.

The IRD cost and benefit analysis also showed that each taxpayer dollar the Government spent on KiwiSaver, only resulted in additional savings ranging from 20-38 cents for the target membership.

The study also showed that the primary incentive for people joining KiwiSaver was for the employer contributions.

For those made redundant under Covid-19 and facing long term unemployment, KiwiSaver has become a luxury that is neither consistent with their reason for joining, nor their changing priorities.

This raises an important question as to whether KiwiSaver members should have early access to their funds outside of the current withdrawal criteria which are; (a) reaching the age of entitlement for government superannuation (age 65 but likely to keep increasing), (b) first home buyers, (c) financial hardship, (d) moving overseas permanently (excluding emigration to Australia) and (e) serious illness/permanent disability.

Individual’s best interests can only be served if they get the best possible return on investment applicable to any given world economic scenario. The KiwiSaver rules are currently forcing people to remain exposed to a risky share market producing negative returns or to remain with cash tied up in a fund that isn’t working for them.

KiwiSaver funds have suffered huge losses recently and those losses are unlikely to be recovered in the share market within a long term economic recession.

In the current situation, the cost of debt far exceeds investment returns, so reducing or offsetting debt is a prudent alternative to continued exposure to the volatile share market.

Other alternatives to consider are; diverting KiwiSaver funds into businesses or other investments which are safer or afford more control and liquidity. Some have been forced to retire early and they should not be forced to wait for their retirement funds. Others might wish to invest their funds to re-train or up-skill for new careers.

In summary, my belief is that for many, KiwiSaver is no longer fit for purpose in the post Covid-19 recession. The IRD study showed that even in boom times KiwiSaver was out-performed by alternative investments and that for taxpayers, the costs of KiwiSaver out-weighed the benefits. There is no incentive for those no longer enjoying employer contributions. There are many ways in which KiwiSaver funds can now be put to much better use in order to achieve the original objectives of asset accumulation, individual well-being and financial independence.

If you are interested in pursuing early withdrawal of your KiwiSaver funds outside of the current rules, then please sign my government petition at: