MONEY MATTERS by Britannia July 2018 – Download the PDF Download Pdf

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How Britannia can revolutionise your retirement

In the last issue of Money Matters we talked about the difference between how much money people need when they retire, and the amount provided by New Zealand Superannuation.

Massey University researchers have labelled it the ‘retirement income gap’ and their research is a timely reminder that most retirees will have to find ways to bridge that gap if they want to maintain their current lifestyle while making their savings last.*

At Britannia we’ve introduced an approach that we believe revolutionises retirement planning in New Zealand. Our new product is based on a proven international concept that we’ve adapted to work for individuals retirement needs, and is a great way for people to address an income gap in their retirement. 

It’s our Lifetime Income Fund and it converts UK pensions or other retirement savings into a regular fortnightly or four weekly income. The income amount paid stays the same, regardless of market movements and will last the life of the investor. Anyone who chooses this option can receive their retirement income benefits for as long as they’d like, or they can redeem any remaining balance of their investment at a time which suits.

The savings are insured so that investors receive regular payments for their entire life. In other words, they won’t outlive the savings they worked hard to accumulate. When an investor passes away any remaining balance is paid to their estate. To provide you with greater certainty of how much you’ll have when you wish to start taking your retirement income, there’s also a great feature so that on each anniversary of your membership your future retirement income is protected from market declines whilst gaining from any market upside. 

Whether you’re nearing retirement, or you’re already retired and interested in a plan that will provide you with a regular income as well make your savings last, we’d love to talk to you. Give us a call on 0800 500 811 for a no obligation chat or email us at 


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Four simple tips for a rewarding retirement

The first rule of retirement income is ‘make sure you never run out of money.’ The second rule of retirement income is – you guessed it – ‘make sure you never run out of money.’

In all seriousness though, there are a few things you can do to make retirement relaxing and rewarding, without the worry that your funds will dry up.

Tip 1. Plan your transition from saving for retirement, to spending in retirement.

You’ve spent your working life saving for retirement. So what happens when you do retire and the money starts flowing the other way? Everyone’s retirement is different. Some people stop working, some continue in their life long careers but with a reduced workload, some start new work and some may just choose to enjoy doing things completely differently. One of the greatest myths in retirement is that it’s about stopping, in our view it’s all about starting!

A flexible plan that balances NZ Superannuation, retirement savings and new sources of income with everyday spending needs, is the first step in enjoying a rich and rewarding retirement. At Britannia we have a number of simple tools that will help you take control of your retirement income and make a successful transition from saving to spending.

Tip 2. Don’t put all your eggs in a term deposit.

This mistake is easy to make – term deposits certainly have their place as they provide certainty and security. Unfortunately they don’t pay you much interest, and you can’t access funds (unless you’re prepared to pay a penalty) until they mature. In addition, term deposits are not an adequate hedge against the erosive impacts of long term inflation. Global interest rates are historically low and that doesn’t look like changing anytime soon, so it’s best to look for other ways to help maximise your hard earned savings.

Tip 3. Know how much life costs.

Massey University has taken a long, hard look at living costs for retired people in New Zealand. Their 2016 study calculated that a no-frills retirement outside Auckland, Wellington or Christchurch would cost $421 per week for a single person and $680 for a couple. It’s even more in the big cities and if you want any extras you’ll have to add a few hundred dollars to those weekly budgets.

Currently, NZ Super pays $390* per week for someone living alone or $600.30* for a couple. So it’s best to start planning now how you can make up the difference.

Tip 4. What’s the life expectancy of your savings?

It’s great news that Kiwis now enjoy a much longer life expectancy. However, many people don’t realise just how long that is. If you reach 65 you can now expect to live another 18 years (if you’re a man) or more than 21 years (if you’re a woman). Life expectancy continues to go up so if you’re only 55 now, chances are it will be even more when you get to 65. As a result you could be facing a situation where you’re retired for a third of your life, and reliant on retirement income all that time. 

When you look at things in this light you need to start thinking of ways to protect your savings while still growing them. 

Depending on your individual circumstances, Britannia’s Lifetime Income Fund may tick both these boxes. It combines managed investment funds to deliver growth (with gains locked in annually) and longevity insurance to generate lifelong payments.

Want more? Talk to us.

If you have a UK pension, KiwiSaver account, a Term Deposit about to mature, or if you’re just interested to see how much you could receive every month with the Lifetime Income Fund, the first step is to get in touch.

Call us on 0800 500 811 or email us at

*NZ Super rates current as at 1 April 2018 with net rates based on M tax rate. The couple rate is the total paid where both qualify.


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To work or not to work? Life beyond 65.

According to new research, almost half of us plan to help fund our retirement by... not retiring! A survey of more than 2,000 people that was commissioned by BNZ found that more than 18% of us are committed to a full-time job past the current pension age of 65, while a further 30% of us intend to work part-time.

Most people chose to continue some form of work for reasons that aren’t purely financial. A sense of purpose and satisfaction, maintaining social contacts and wanting to keep using their life-long skills are just a few examples. 

Jean, a key member of our team who has passed “normal retirement age”, has kept working for reasons just like these.

“I have been with Britannia for just over 10 years and have picked up quite a bit of historical knowledge that can be valuable at times in helping our members. So all you retirees who are coming up to 60 or 65, hang in there and say ‘age is just a number’ – you are still valuable and able to contribute.”

Money, though, can’t be ignored as a major factor in retirement choices.

People who have already retired can give us a good indication of what pre-retirees will soon face. More than half the people surveyed who were over the age of 65 used employment to pay for non-essential things like travel, while 31% said they needed the money to pay essential bills.

When asked what advice she would give retirees, Jean said, “If you are able to keep working it can provide you with extra disposable income for play and spending on the grandchildren. 

Also the stimulation you receive from your work mates, plus overworking your brain to try and keep up with new things can be challenging but also rewarding when you get it.”

Aside from paid work, the BNZ survey found the majority of New Zealanders expected superannuation savings, either old-school workplace schemes or KiwiSaver funds, would be their back-up plan to support an above pension-level lifestyle. Another 34% had income outside super, such as rental properties or shares, while about a quarter expected to generate retirement spending money by downsizing their homes.

US financial giant JP Morgan suggests that retirees can manage both spending and income uncertainty, by matching “dependable income sources with fixed retirement expenses, while coordinating other investments with more discretionary expenses”. They list annuities as one way to lock in a ‘dependable income source’. In New Zealand, our Lifetime Retirement Income Fund offers certainty around having an income for life. 

Paul Carter, BNZ director of retail and marketing, said the bank’s recent survey highlights that the “gap between those who choose to work in retirement and those who have to is too high”. However, he also offers an optimistic take saying, “There’s a real opportunity for people to narrow that gap by being more proactive about planning their finances.”  

Whatever your age and circumstances, start thinking about what you want later on in life and start planning how to achieve it. Give us a call at Britannia on 0800 500 811 or email us at and we’d be happy to give you some advice.

Disclaimer: This publication has been prepared for your general information. While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken for any errors or omissions. This publication does not constitute financial or insurance product advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. No part of this publication may be reproduced without prior written permission from our company.