Nearly three in four young KiwiSaver members say they have joined the scheme to save a deposit on their first property, according to the new study.
KiwiSaver allows members to take out a portion of their retirement income for a house deposit, provided they have been part of the scheme for three or more years. KiwiSaver has become a more popular way of funding home deposits in recent years as young people struggle to get on the property ladder, with sky-high prices and lending restrictions deterring potential buyers.
Westpac's survey of 1000 consumers reveals slightly older millennials are also using the scheme to fund deposits. A total of 59 percent of 25-29s and 41 percent of 30-34s said their main reason for joining Kiwisaver was to fund a first-home deposit.
Katie Christoffersen, head of private wealth at Westpac, told TMM Online the figures highlighted the importance of the scheme to young property hunters. Christoffersen said Westpac was "not surprised" to see KiwiSaver used as a deposit-saving tool. She added: "It is a great product, and can provide a huge boost to savings."
Yet there was a word of warning for young buyers dipping into their pensions.
Simon Power, Westpac NZ’s General Manager of Consumer Bank and Wealth, said young buyers should not abandon long term savings for their dream home: "Owning a home is very positive to financial security, but the key is to maintain KiwiSaver contributions after purchasing their home so that their retirement savings don’t fall behind. It can be tempting to leave it for a year or two which can easily become longer. It’s important they start saving again quickly.”
