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May 08, 2017

Start Up Spotlight Series | Simplicity

We talked to Amanda Morrall from Simplicity about how the idea for their KiwiSaver plan came about and what it offers New Zealanders.

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Simplicity is a non-profit KiwiSaver plan that only charges members what their account costs to manage - nothing else. Simplicity estimates that an average Kiwisaver member could be $65,000 better off in their lifetime if investing with Simplicty, compared to their competitors.

 

Tell us how the idea for Simplicity came about:

Four years ago, a group of industry veterans decided to make the biggest possible difference to KiwiSaver, and Simplicity was the answer. It required changes to regulations, development of a 100% online platform, and a lot of help from some of the largest and most successful financial organisations. It all came together in the spirit of making NZ's much wealthier in retirement. 

 

New Zealand is an aging population; making sure we are financially secure when we reach retirement is extremely important. What benefits does Simplicity offer over other KiwiSaver competitors?

As the lowest fee KiwiSaver provider, Simplicity will make the average investor $65,000 richer on retirement. On top of lower fees, Simplicity’s user experience is second to none. It’s easier, more efficient and more engaging than any other on the market.  

Members can see their wealth growing over time, they can make some predictions based on contribution levels, and they can change their fund type without incurring any extra fees. They can also feel good about their investment portfolio being nuke free, bomb free and smoke free. Plus, 15% of management fees get donated to charity. 

So far more than $50,000 has been earmarked for charity and members together have saved $1 million in fees. 

 

As KiwiSaver is a government initiative, do you think people are fully aware of the options surrounding KiwiSaver? 

More than 2.6 million New Zealanders are invested in KiwiSaver but at least half of them are not actively contributing. That means that many are leaving money on the table in terms of member tax credits. Remember that for those over 18, Government will contribute up to $521 per year if a minimum $1,043 contribution is made. That’s $20 a fortnight, four of five coffees in fact. 

Although many are using KiwiSaver for a first-time home withdrawal, there is still a lot of confusion about how best to save through higher contribution rates and also lower fee providers like Simplicity. The HomeStart grant, which works alongside KiwiSaver, is another great initiative that also requires more exposure to help first time home buyers.

KiwiSaver is turning 10 years old this year but we still have a long way to go to educate the public about how it can help to make their retirement a more comfortable one.