"Then the grand daddy of them all in 1976, Robert Muldoon’s National Superannuation, payable initially to couples at 80% of the average ordinary wage at 60. Historian Sir Keith Sinclair called it “the biggest election bribe” in our history."
The DomPost has published private income figures from the Positive Ageing Report released on Friday.
The Social Development Ministry survey found the average private income of a single person aged over 65 had dropped 88 per cent from $2200 a year in 1989 to just $260 in 2004.
Private income is income that excludes public pensions or means-tested welfare benefits. Here is the graph;
Why bother saving when the government is doing it for you?
2 comments:
The Dom article, and this post, don't attempt any analysis of why this statistic has fallen - the Dom journalist seems to have stopped thinking as soon as they'd found a headline. And you haven't gone further than to find a statistic that reinforces your opinion.
I agree public pensions undermine incentives to save for your own retirement - but there are probably a bunch of other reasons why this median private income stat has fallen. Most importantly, the 65+ population is larger and older than in 1990. And medians are probably the wrong stat to use if there's major breaks across the income distribution.
The report itself points to some shortcomings in their measurement method. The large difference between single and double private incomes would also be worth investigating. But if I had to analyse every statistic I use I'd be chained to the keyboard far longer than I care to be. Some I do but welfare for the 65+ isn't of nearly as much interest to me as welfare for the working age.
But your point re other reasons is entirely valid.
Like the diminishing (?) role of the private sector in pension provision. And where do reverse mortgages come into the picture? Can they increase living standards but not necessarily register as private income? Are people declaring all their private income in surveys? There are incentives not to divulge due to means-testing on residential care. And wealthier pensioners are increasingly living offshore.
As you say John deeper analysis is warranted but I didn't have the inclination to do it.
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