Financial Literacy and Retirement Planning in New Zealand

by Diana Crossan, David Feslier and Roger Hurnard; CeRP WP N. 113/11

 The paper has been realized for the Netspar Theme grant project Financial Literacy: Evidence and Implications for Retirement Planning, Saving Behavior, and Financial Education Programs” and presented at the CeRP workshop “Financial Literacy around the World” (FLat World) (Collegio Carlo Alberto, 20-21 December 2010).


We compare levels of financial literacy in New Zealand with levels in five other countries and between the general adult population of New Zealand, people of Māori ethnicity and, more particularly, the people of Ngāi Tahu, a Māori tribe based mainly in the South Island of New Zealand who have initiated a long-term savings scheme and are also providing financial education courses for members of their tribe.

Our findings indicate that, while the financial knowledge level of Māori people generally is lower than for non-Māori (controlling for demographic and economic factors), there is little difference between the financial knowledge of the people of Ngāi Tahu and other New Zealanders. Finally, the analysis finds financial literacy (defined as getting all three test questions correct) is not significantly associated with thinking about planning for retirement ‘a lot’, although it appears to be significant for other measures of financial achievement. This result could reflect the dominant role of New Zealand’s universal public pension in providing retirement income security.





Published: March 2011

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