Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR...

124
2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August 2010 CONTACT[S] Jocelyn Rout or Leilani Liew

Transcript of Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR...

Page 1: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

2010 ANZ Ngāi Tahu

Financial Knowledge

Survey

PREPARED FOR Te Rūnanga o Ngāi Tahu

ATTENTION Andrew Scott or Teone Sciascia

ISSUE DATE August 2010

CONTACT[S] Jocelyn Rout or Leilani Liew

Page 2: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Auckland

Colmar Brunton House 6-10 The Strand

PO Box 33-690

Takapuna, Auckland 0622

P +64 9 919 9200 F +64 9 919 9201

Wellington

Level 9 101 Lambton Quay

PO Box 3622 Wellington 6140

P +64 4 913 3000

F +64 9 913 3001

E [email protected] W www.colmarbrunton.co.nz

Colmar Brunton undertakes all research

projects to the highest possible standards,

and in accord with the principles detailed in

the MRSNZ Code of Practice which is based

on the ESOMAR Code of Conduct for

Market Research.

All methodologies and techniques outlined

in this report are provided solely for use by

the client.

Copyright is reserved by

Colmar Brunton.

Table of Contents

Executive summary ................................................................ 1

Research method ....................................................................... 1

Construction of financial knowledge groups ................................... 1

Summary of findings................................................................... 1

Conclusions........................................................................... 10

Background and objectives ...................................................11

What is financial knowledge and why is it important? ....................11

How financial knowledge was measured.......................................11

Research methodology ..........................................................14

Detailed findings....................................................................16

Financial knowledge groups ........................................................16

Areas of highest knowledge and lowest knowledge........................26

Behaviours................................................................................29

Attitudes ..................................................................................33

Current financial situation...........................................................37

Financial advice.........................................................................44

Financial product ownership .......................................................51

Money management ..................................................................54

Budgeting.................................................................................75

Goal setting, long term goals, financial planning............................79

Debt management.....................................................................82

Home loans/mortgages ..............................................................86

Managing risk ...........................................................................95

Saving......................................................................................97

Retirement planning ................................................................103

Investing ................................................................................113

Consumer rights and responsibilities ..........................................119

KiwiSaver ...............................................................................121

Page 3: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 1

Executive summary

This report presents the results of the financial knowledge survey of 400 Ngāi Tahu iwi members.

Colmar Brunton was commissioned to conduct this research for and in partnership with Te Rūnanga o

Ngāi Tahu (and with the support of the Retirement Commission).

This ANZ Ngāi Tahu Financial Knowledge Survey follows the 2009 ANZ Retirement Commission

Financial Knowledge Survey which provided a national overview of the financial knowledge of New

Zealanders. Comparisons between the Ngāi Tahu survey results and the New Zealand results

(national average) have been made in this report.

The purpose of the Ngāi Tahu survey is to:

� establish a benchmark of financial knowledge among Ngāi Tahu members against which future comparisons can be made to evaluate initiatives introduced to improve the financial literacy of Ngāi Tahu members.

� enable the financial knowledge of Ngāi Tahu members to be benchmarked against that of all adult New Zealanders.

Research method

A partnership approach between Colmar Brunton and Te Rūnanga o Ngāi Tahu (Te Rūnanga) was

used in conducting this survey. Colmar Brunton undertook the design of the survey, trained and

supervised the interviewers from Te Rūnanga, processed the data and undertook the analysis and

reporting. The trained members of Ngāi Tahu carried out the interviews.

A total of 400 Ngāi Tahu iwi members aged 18 years or over participated in the research between the

5th of April and the 18th of June 2010. All interviews were conducted face-to-face in nine main

regions. To reflect characteristics of the population of interest, the data have been weighted by Whai

Rawa membership (Te Rūnanga’s saving initiative).

Construction of financial knowledge groups

In 2009, Colmar Brunton conducted a survey on behalf of the Retirement Commission to assess the

financial knowledge of New Zealanders. Using a constructed financial knowledge score (FKS),

respondents were grouped by their level of knowledge into three categories (tritiles): ‘Low

knowledge’, ‘Medium knowledge’ and ‘High knowledge’.

To look at the more extreme ends of the knowledge scale, two further groups were constructed: the

Lowest knowledge group (a subset of the Low knowledge group) and the Advanced knowledge group

(advanced knowledge points were assigned to predominantly investment related questions).

Using the same FKS definitions, knowledge groups for the 2010 ANZ Ngāi Tahu Financial Knowledge

survey were constructed allowing comparisons to be made between Ngāi Tahu’s financial knowledge

and the general New Zealand population.

Summary of findings

Financial knowledge groups

� The financial knowledge of Ngāi Tahu is consistent with the national results with 40% of respondents in the High knowledge group, 31% in the Medium knowledge group, and 29% in the Low knowledge group.

Page 4: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 2

� Similarly, the sizes of the Lowest knowledge group (10%) and the Advanced knowledge group (19%) are also consistent with the national results.

� The Lowest knowledge group is characterised by:

- those aged 18-34 year olds and 65 or over

- those with primary or basic education

- those who are renting

- those not in paid employment

- those with low personal income.

� Financial knowledge among Whai Rawa members tends to be higher than non-members with 45% of Whai Rawa members in the High knowledge group compared to only 36% of non-members.

Areas of highest knowledge and lowest knowledge

� Whai Rawa members tend to score higher than non-Whai Rawa members on most areas of financial knowledge.

Behaviours

� When respondents were asked to select a statement about savings that best applies to them, the following responses were given:

- 42% selected ‘I save money on a regular basis’, which is significantly lower than the national average (49%)

- 26% selected ‘I sometimes save money’

- 15% selected ‘I can’t save, there’s never enough money’

- 13% selected ‘I save only when I want to save up for something big or special’

- 3% selected ‘I don’t save because I don’t need to’.

� When asked about how they control their expenses, 37% of respondents said that without keeping a written record they keep a fairly close eye on expenses, 31% said they use written or electronic records to keep a close eye on expenses, 19% keep an eye on their expenses a bit, and 12% don’t keep an eye on their expenses at all. The latter is significantly higher than the national average (5%).

� Respondents were asked about the difficulties they have with managing money. Fourteen percent of respondents said they have difficulties managing money. The main reasons for this are:

- they don’t have or earn enough money (50%)

- they can’t control their own behaviour/budget (40%)

- increasing prices/inflation (16%)

- family commitments/expenses (16%)

- usually monthly bills (16%)

- unexpected bills/expenses (14%), which is significantly lower than the national average (27%).

Attitudes

� The following seventeen attitudinal statements were read out to respondents and respondents had to indicate whether they agreed or disagreed with each statement:

- 90% agree that it is important to shop around to get the best deal for financial products and services

- 85% agree it is important to have a current will

Page 5: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 3

- 82% believe they are personally responsible for their financial future, which is significantly lower than the national average (88%)

- 75% feel confident about managing their financial affairs

- 69% know what insurance they need to cover their needs

- 59% agree that investing is a way to achieve financial goals, which is significantly lower than the national average (72%)

- 52% agree that if they were investing, they would take into account ethical, environmental, and social factors when deciding where to invest

- 51% would be able to manage for three months if they had a major loss of income, which is significantly lower than the national average (57%)

- 33% think they manage OK but that some of the financial decisions made by other members of their family are not so good, which is significantly higher than the national average (26%)

- 28% think people with KiwiSaver will have an adequate retirement income, which is significantly higher than the national average (21%)

- 25% have worked out how much they need for their retirement

- 24% spend all of their income as they get it, which is significantly higher than the national average (16%)

- 22% said that they don’t really plan for their future

- 20% find it hard to make ends meet because there is not enough money

- 13% agree that because of NZ Superannuation they don’t need to save for retirement, which is significantly higher than the national average (7%)

- 7% find that they have to borrow short term to make ends meet

- 4% feel out of control with their borrowing and debt generally, which is significantly lower than the national average (9%).

� Respondents were asked three questions about their perceptions of control over their life:

- 79% strongly agree that their life is determined by their own actions, 18% somewhat agree, 1% neither agree nor disagree, and 1% somewhat disagree.

- 8% strongly agree that their life is determined by things beyond their control, 31% somewhat agree, 20% neither agree nor disagree, 23% somewhat disagree, and 17% strongly disagree.

- 5% strongly agree that their life is determined by the actions of other people, 25% somewhat agree, 17% neither agree nor disagree, 27% somewhat disagree, and 27% strongly disagree.

Current financial situation

� Thirty-eight percent have taken some sort of action in the past 12 months that indicates financial strain.

� Twenty-four percent were unable to keep up with some type of payment in the past 12 months (for hire purchases, credit cards, utilities, mortgage, or rent).

� Compared to 12 months ago, 33% are now in a better financial situation, 45% are in about the same financial situation, and 21% are in a worse financial situation.

� Respondents were given a list of factors that might contribute to a worsened financial situation and were asked to select the ones that have happened to them in the past 12 months. The most common factors mentioned include:

- a drop in income/reduced hours of work (25%)

- a reduction in the value of assets (18%)

- illness (13%)

- three months or more of unemployment (10%).

� Compared to 12 months ago, 47% said that they are now more aware of their financial situation compared to 12 months ago, 1% said they are less aware, and 51% said they are about the same.

Page 6: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 4

� Compared to 12 months ago, 33% said that they are now more concerned about their financial situation, 10% said they are less concerned, 55% said they are about the same, and 1% didn’t know.

Financial advice

� Seventy-nine percent of respondents have obtained some type of financial information or advice in the past 12 months with banks being the most common source (52%), followed by friends and family (38%).

� When respondents were asked what factors or situations would lead them to seek financial information or advice, the following were mentioned most frequently:

- if they struggled to pay bills/had financial difficulties (34%)

- if they had more money/earned more money (19%)

- if they were trying to avoid/get out of debt (10%)

- if they had a loss/decrease in income/experienced unemployment (10%).

� When respondents were asked how they would prefer to receive financial information or advice on managing their personal finances, the following channels were mentioned most frequently:

- their bank (50%)

- family/relatives/friends (39%)

- financial advisor (37%)

- websites (25%).

� Forty-three percent of respondents have at some point in time read a Sorted booklet or visited the Sorted website, which is significantly higher than the national average (34%).

� Twenty-seven percent have read a Sorted booklet or visited the Sorted website in the past 12 months.

Financial product ownership

� At least three quarters of respondents have the following financial products:

- cheque/transaction/current account (90%)

- savings account (82%)

- vehicle insurance (80%), which is significantly lower than the national average (73%)

- house and contents insurance (79%), which is significantly lower than the national average (69%).

Money management

� At least three quarters of respondents use the following payment methods:

- EFTPOS (88%), which is significantly higher than the national average (83%)

- cash (85%), which is significantly higher than the national average (77%).

� To test maths and standard literacy in relation to bank statements, respondents were provided with a sample bank statement and were asked to calculate the amount of time it would take for the bank statement owner to save a specified amount of money, 65% of respondents1 were able to correctly calculate the time required. This is significantly lower than the national average (74%).

� When given a sample income and expenditure scenario and when asked to calculate how long it would take that person to save a specified amount of money, 82% were able to calculate the correct answer.

1 Based on a subgroup of the population.

Page 7: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 5

� Ninety-one percent of respondents knew the correct definition for the term ‘savings’.

� Eighty-two percent of respondents knew the correct definition for the term ‘term deposit’.

� Seventy-six percent of respondents knew the correct definition for the term ‘asset’.

� Sixty-eight percent of respondents knew the correct definition for the term ‘capital gain’.

� Sixty-four percent of respondents knew the correct definition for the term ‘liability’.

� Fifty-six percent of respondents knew the correct definition for the term ‘real rate of return’, which is significantly lower than the national average (66%).

� Fifty-eight percent of respondents knew the correct definition for the term ‘net worth’.

� Eighty-eight percent of respondents knew that ‘gross salary’ refers to before tax.

� Seventy-six percent of respondents knew what the term ‘secured loan’ means, which is significantly higher than the national average (70%).

� Ninety-two percent of respondents understood that if someone is not able to make the payments on a secured loan, the organisation that lent them the money is allowed to sell the asset that was used as security.

� Sixty-one percent of respondents had correct understanding of the term ‘equity’.

� Sixty-six percent of respondents correctly identified that paying off the full amount of a credit card each month would mean interest free days on purchases.

� Eighty-three of respondents correctly identified that money will still be owing on a credit card if only the minimum amount owing was paid.

� To test standard literacy in relation to bank statements, respondents were provided with a sample bank statement and were asked to identify how much the bank statement owner had at the end of each month. Ninety percent of respondents answered this question correctly. Respondents were also asked how much the bank statement owner had saved that month and 81% of respondents answered this question correctly.

� To test maths literacy in relation to the same bank statement, respondents were asked to calculate how much the bank statement owner had saved. Seventy-four percent of respondents2 were able to calculate the amount correctly, which is significantly lower than the national average (80%).

� Respondents were tested on their knowledge of the fees that apply to basic banking services by having to choose one of three scenarios where the least amount of fees would be charged. Sixty-nine percent of respondents correctly identified the scenario with the lowest fees, which is significantly higher than the national average (60%).

� Respondents were asked to identify the financial advantages of using Internet banking instead of over the counter banking at a local branch. Fifty-two percent of respondents correctly identified cheaper costs/lower or no fees as the main financial advantage.

� Respondents were asked if there were advantages to paying bills on or just before the day it’s due. Three quarters (77%) of respondents said there was an advantage and of those who were aware of the advantage, 54% said this was because they would qualify for a discount, which is significantly higher than the national average (47%). Forty-nine percent said this was because they would avoid overdue fees, which is significantly lower than the national average (57%), and 14% said this was because they could maximise the interest earned.

Budgeting

� Seventy-nine percent of respondents were able to correctly identify that the best description of a budget is ‘a plan for what you earn and what you spend’.

� When asked for reasons why it is important to have a budget, the following responses were given:

- 92% mentioned reasons relating to control

- 56% mentioned reasons relating to planning

2 Based on a subgroup of the population.

Page 8: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 6

- 48% mentioned reasons relating to tracking.

� Respondents were asked to identify, from a list provided, which best describes who could benefit from a budget. Eighty percent correctly said that ‘everyone’ can benefit from a budget, which is significantly higher than the national average (74%), while 14% said people who have difficulties managing money, 5% said people without much money, and 1% said people with a lot of money.

� Sixty percent of respondents have a budget.

Goal setting, long term goals, financial planning

� Seventy-nine percent of respondents have financial goals of which 31% have them written down and 69% don’t have them written down.

� Twenty-four percent have a financial plan that is written down, while 76% do not have a written financial plan.

� To test respondents’ understanding of financial plans, a series of true and false statements were read out and respondents were asked to select the answer that they thought was correct:

- 85% of respondents correctly chose false for the statement that ‘financial plans are set up once and you use that plan throughout your life’, while 10% incorrectly chose true, and 4% didn’t know.

- 96% of respondents correctly chose true for the statement that ‘financial plans should take into account possible changes in your life’, while 2% incorrectly chose false, and 2% didn’t know.

- 85% of respondents correctly chose false for the statement that ‘financial planning is about investments only’. Compared to the national average (93%), this is significantly lower, while the proportion who agreed with this statement is significantly higher (8% of Ngāi Tahu c.f. 4% of New Zealanders). A further 6% didn’t know.

Debt management

� To test understanding of the responsibility of a guarantor, respondents were asked to choose from a list of scenarios which one would best describe the responsibility of a guarantor; 82% had correct understanding.

� To test understanding of the fastest way to pay off debt, respondents were asked to choose from a list of scenarios, which scenario would best describe how to pay off a credit card and personal loan faster. Fifty-seven percent correctly identified the best scenario, which is significantly higher than the national average (49%).

� To test understanding of the importance of paying off debt faster, respondents were given a scenario and were asked to choose whether paying more off a home loan or investing in term deposits would likely result in getting out of debt faster. Seventy percent of respondents correctly identified the best solution.

Home loans/mortgages

� To measure respondents’ understanding of how to minimise interest on a mortgage, a series of true and false statements were read out and respondents were asked to select the answer that they thought was correct:

- 51% of respondents correctly chose true for the statement that to minimise the interest ‘pay half your monthly payment every fortnight’, while 32% incorrectly chose false, and 15% didn’t know.

- 91% of respondents correctly chose true for the statement that to minimise the interest one should ‘increase amount of regular payments’, which is significantly higher than the national average (87%). 3% incorrectly chose false and 5% didn’t know.

- 83% of respondents correctly chose false for the statement that to minimise the interest ‘put some payments on credit card and pay it off every six months’, while 4% incorrectly chose true, and 11% didn’t know.

Page 9: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 7

� To test respondents’ understanding of equity and leverage, respondents were given a scenario and were asked to choose from a list of options which would be the best way to finance a secondary property without a deposit. Seventy-seven percent of respondents gave the correct answer.

� To test respondents’ understanding of the circumstances in which a fixed interest rate is preferable, respondents had to select one of four scenarios which would best suit a two year fixed interest rate home loan rather than a variable or floating home loan. Seventy percent of respondents correctly said that it is better to have a two year fixed interest rate home loan when interest rates are expected to increase over the next two years, which is significantly higher than the national average (63%).

� To measure respondents’ understanding of fixed, floating, and variable interest rates, a series of true and false statements were read out and respondents were asked to select the answer that they thought was correct:

- 80% correctly chose true for the statement that with a fixed rate home loan, the interest rate remains the same for the term of the loan, while 14% incorrectly chose false, and 5% didn’t know.

- 54% correctly chose true for the statement that with a variable or floating rate home loan you can repay it in part of in full without penalty, which is significantly higher than the national average (46%), while 21% incorrectly chose false, and 24% didn’t know.

- 28% correctly chose false for the statement that with a revolving credit facility loan, you are charged a penalty for early repayment, which is significantly lower than the national average (34%). 26% incorrectly chose true and 44% didn’t know.

Managing risk

� To test respondents’ understanding of insurances, respondents were provided with different scenarios and were asked to identify the scenario that would require the greatest amount of life insurance. Eighty-seven percent of respondents selected the correct scenario, which is significantly lower than the national average (93%).

� To test respondents’ understanding of entitlement when two people separate, respondents were given a scenario and asked whether or not the person in the scenario would be entitled to a share of the house. Eight-four percent of respondents answered this question correctly, which is significantly higher than the national average (78%).

Savings

� To test respondents’ understanding of compound interest, respondents were provided with different scenarios and were asked to choose the scenario that would pay the most interest in total. Twenty-eight percent of respondents answered this question correctly, which is significantly lower than the national average (37%). Of those who answered the question correctly, 93% were able to explain why.

� Eighty-seven percent of respondents had correct understanding of inflation.

� Eighty-five percent of respondents had correct understanding of interest accrual.

� Seventy-six percent of respondents had correct understanding of the effects of inflation on savings, which is significantly less than the national average (81%).

Retirement planning

� Forty-nine percent of respondents have thought about financial planning for retirement either a lot (29%) or a little bit (20%), which is significantly lower than the national average (56%), while 34% have thought about it a little, and 16% haven’t thought about it at all.

� When asked what things a person should consider when they think about saving for retirement, the following answers were given:

Page 10: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 8

- 83% mentioned things relating to retirement spending/lifestyle, which is significantly higher than the national average (75%)

- 55% mentioned things relating to their current financial situation

- 47% mentioned things relating to their retirement income

- 33% mentioned things related to their length of retirement, which is significantly higher than the national average (24%).

� Eighty-five percent of respondents knew that people are entitled to New Zealand Superannuation once they turn 65 years of age.

� Respondents were asked to select, from a list of possible amounts, the figure closest to an after-tax New Zealand Superannuation amount for a single person living alone. Thirty-five percent of respondents were able to correctly identify the closest amount.

� Fifty-four percent of respondents were aware that New Zealand Superannuation is not income tested, which is significantly higher than the national average (44%). Thirty percent thought that it was income tested and 16% didn’t know.

� Fifty-six percent of respondents were aware that New Zealand Superannuation is not asset tested, which is significantly higher than the national average (50%). Twenty-three percent thought that it was asset tested and 21% didn’t know.

Investing

� Ninety percent had correct understanding that an investment with a higher than average return is likely to have a higher than average risk.

� Eighty-eight percent had correct understanding that even with good share investments, in the short term the value can usually be expected to go up and down.

� Fifty-one percent of respondents said that if someone was considering investing in an investment that was advertised as having a return well above market rates, it’s probably too good to be true, while 42% said they would recommend investing lightly, and 3% said they would recommend investing heavily.

� When asked which type of savings or investment would generally be considered to make the most money over the next 15 to 20 years, the following responses were given:

- 38% of respondents said fixed interest investment, which is significantly lower than the national average (49%)

- 30% said a range of shares

- 29% said a savings account, which is significantly higher than the national average (22%)

- 1% said a cheque account, which is significantly higher than the national average (0%).

� When asked what should be taken into account when looking at investment offers, the following responses were given:

- 73% mentioned factors related to risk

- 64% mentioned factors related to return

- 27% mentioned factors related to duration

- 26% mentioned factors related to liquidity

- 22% mentioned factors related to cost.

� To test respondents’ understanding of how to reduce risk, a series of true and false statements were read out and respondents were asked to select the answer that they thought was correct for someone who wanted to reduce the risk with an investment:

- 46% of respondent correctly chose true for the statement ‘take out capital guaranteed investments’, while 6% incorrectly chose false, and 45% didn’t know.

- 66% of respondents correctly chose true for the statement ‘diversify investment portfolio and have a variety of investments’, which is significantly lower than the national average (74%). 8% of respondents incorrectly chose false, and 22% didn’t know.

Page 11: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 9

- 59% of respondents correctly chose false for the statement ‘invest only in property’, which is significantly lower than the national average (70%). 25% of respondents incorrectly chose true, and 14% didn’t know.

- 82% of respondents correctly chose true for the statement ‘change from high risk to low risk investments’, while 6% incorrectly chose false, and 10% didn’t know.

� Ninety-two percent of respondents correctly said that an investment that promised a very high return with little risk was probably a scam, which is significantly higher than the national average (88%).

� Ninety-two percent of respondents correctly said that an investment being offered to only a selected few people was probably a scam.

� Eighty percent of respondents correctly said that an offer by a well known, reputable financial organisation was probably not a scam.

� Sixty-two percent of respondents correctly said that an offer where the minimum amount to invest keeps reducing is probably a scam, which is significantly lower than the national average (74%).

� Ninety-four percent of respondents correctly agreed that before investing, it is important to read and understand the investment statement that explains details about the investment, which is significantly lower than the national average (97%).

� Ninety-four percent of respondents correctly agreed that before handing money to a financial adviser, a person should ask about their qualifications and experience.

� Seventy-six percent of respondents correctly agreed that it is important to find out how a financial adviser is being paid.

� Seventy-five percent of respondents correctly agreed that a financial advisor has to give you a disclosure statement.

Consumer rights and responsibilities

� While 95% of respondents knew that it’s not alright to reveal your internet banking password to a friend, only 79% knew that it’s not alright to reveal your internet banking password to a bank staff member, which is significantly lower than the national average (86%). Further, only 42% knew that it’s not alright to reveal your internet banking password to a partner.

KiwiSaver

� Thirty-six percent of respondents are KiwiSaver members, which is significantly higher than the national average (29%). However, this difference may be attributed to the continued growth in the uptake of KiwiSaver in general.

� Just over half of Ngāi Tahu KiwiSaver members joined in 2007 with slightly smaller proportions joining each subsequent year.

� Eighty-one percent of Ngāi Tahu KiwiSaver members are currently contributing to their fund.

- 32% are contributing 2%, which is significantly higher than the national average (15%)

- 47% are contributing 4%, which is significantly lower than the national average (64%)

- 4% are contributing 8%

- 4% are not wage earners.

Page 12: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 10

Conclusions

At an overall level, the Ngāi Tahu survey results are fairly similar to the national New Zealand results.

In particular, the sizes of the knowledge tritiles are similar between the two surveys, and the levels of

correct knowledge pertaining to many of the specific areas of knowledge that were tested are also

similar between the two surveys. This suggests that Ngāi Tahu will benefit from initiatives that are

targeted at the general population, and rolled out nationally, in the same way that the general New

Zealand population will benefit from such initiatives. However, if these national initiatives are

provided through unique channels that are tailored specifically for Ngāi Tahu iwi members, it is likely

that they will benefit from these initiatives to an even greater degree.

There also appear to be opportunities to deliver programmes to Ngāi Tahu iwi members that

specifically cater for those with particularly low financial knowledge. The Lowest knowledge group

has the least access to financial products and therefore are more at risk. However, they are also the

group that can benefit from specific attention the most. They describe themselves as having less

control over their own lives. This, coupled with the fact that around a third of Ngāi Tahu iwi

members say they are influenced adversely by their family’s financial decision making, has significant

implications for the delivery of financial knowledge initiatives to this group as they are less likely to

help themselves and more likely to depend on others for help and direction.

As noted above, while the results relating to specific areas of knowledge are generally in line with

national averages, there are some key differences which should inform decisions Te Rūnanga o Ngāi

Tahu makes on where to focus its efforts.

Of particular note, there is a common perception among Ngāi Tahu iwi members that with KiwiSaver

and New Zealand Superannuation, there is less need to think about, and plan for, retirement. This

perception is likely to have influenced the fact that compared to the national average, relatively fewer

Ngāi Tahu iwi members have thought about retirement. This finding is despite the older age profile

of the Ngāi Tahu respondents.

In addition, Ngāi Tahu iwi members are less likely to see the benefits of investments in achieving

financial goals. This, coupled with a relatively more common perception that a savings account will

make the most money over the next 15 to 20 years, and the fact that Ngāi Tahu members are

significantly less likely than the national average to be saving on a regular basis, indicates that Ngāi

Tahu iwi members may have a more conservative view of money management and investing.

While Ngāi Tahu tend to have more positive perceptions than the national average towards investing

in property, this may reflect a difference in values regarding what they should be investing in for their

future and for future generations.

Around half of Ngāi Tahu iwi members are now more aware of their financial situation compared to

12 months ago. Conversely, a third are now more concerned about their financial situation compared

to 12 months ago and over a third of Ngāi Tahu have experienced financial strain over the past 12

months with one in four unable to keep up with some type of payment. However, it is interesting to

note that the factors that have contributed to worsened financial situations are the same factors that

will lead them to seek financial information. And, it is evident that they are actively seeking help in

their financial matters with four in five respondents having sought financial advice in the past 12

months and just under half having read a Sorted booklet or visited a Sorted website at some point in

time.

Page 13: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 11

Background and objectives

In 2009 the Retirement Commission (with the support of ANZ) commissioned Colmar Brunton to carry

out a survey among New Zealanders to find out how much New Zealanders know about managing

their personal finances. This is referred to as the national survey in this report.

In 2010, Colmar Brunton was commissioned to conduct the same survey for, and in partnership with

Te Rūnanga o Ngāi Tahu (and with the support of the Retirement Commission) among 400 Ngāi Tahu

iwi members. This report presents the detailed findings of the Ngāi Tahu survey with comparisons

made with the national results.

The purpose of the Ngāi Tahu survey is to:

� establish a benchmark of financial knowledge among Ngāi Tahu members against which future comparisons can be made to evaluate initiatives introduced to improve the financial literacy of Ngāi Tahu members.

� enable the financial knowledge of Ngāi Tahu members to be benchmarked against that of all adult New Zealanders.

To increase the opportunity for involvement of Ngāi Tahu iwi members in the implementation of the

project and to help manage costs, Colmar Brunton and Te Rūnanga o Ngāi Tahu (Te Rūnanga)

worked together in partnership to conduct this survey.

What is financial knowledge and why is it important?

Financial knowledge for the purposes of both the Ngāi Tahu survey and the national survey was

defined as:

“the ability to make informed judgements and to take effective decisions

regarding the use and management of money.”3

The more financial understanding people have, the more effectively they can manage their day-to-

day finances and long term financial planning. Levels of financial knowledge and the ability to use

that knowledge to make good financial decisions can have a strong impact on the financial and

ultimately the health and social wellbeing of whānau, hapū, and iwi and their ability to make

meaningful choices and decisions about their lives.

How financial knowledge was measured

The Ngāi Tahu survey has used the same financial literacy framework, measurement approach, and

scoring approach that were adopted for the national survey.

In reading this report, the reader should bear in mind that the national survey (and thus the Ngāi

Tahu survey) was primarily designed to test and measure the population’s financial knowledge. The

scoring for grouping responses is mainly done on the basis of pure knowledge questions. For

example, true/false questions were heavily used. However, the survey also asked questions about

people’s understanding of financial issues and their attitudes and behaviours, for which scenarios and

show cards were used.

3 This is the definition used in New Zealand's National Strategy for Financial Literacy. It is consistent with that used in the 2009

New Zealand survey and previous surveys commissioned by ANZ Bank in Australia. The definition was originally adopted for these surveys from UK research.

Page 14: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 12

What was measured?

As with the national New Zealand survey, the Ngāi Tahu study sought to measure knowledge and

understanding, behaviour and attitudes as they relate to the following specific areas of interest:

� Mathematical and standard literacy – essential mathematical, reading, and comprehension skills

� Financial understanding – understanding of what money is and how it is exchanged; understanding of where money comes and goes from

� Financial competence – understanding the main features of basic financial services; understanding financial records; understanding which type of payment is best to use and why; understanding mortgages; attitudes to spending money and saving; awareness of the risks associated with some financial products, and appreciation of the relationship between risk and return

� Financial responsibility – ability to make appropriate personal life choices about financial issues; understanding consumer rights and responsibilities.

The survey tested the following areas of personal financial knowledge: money management,

budgeting, goal setting, financial planning, debt management, home loans and mortgages, managing

risk, savings, planning for retirement, and investing.

Financial knowledge framework and scoring

Careful consideration was used when designing the framework used for the national financial

knowledge survey. The same framework was applied to the Ngāi Tahu financial knowledge survey.

The financial knowledge framework set out the knowledge and skills required for a person to be

financially literate at a basic and at an advanced level. This helped determine the topics which would

be covered by the survey.

Survey questions were designed to capture the most important skills and knowledge under all of the

categories in the framework and an effort was made to ensure the questions covered as much of the

framework as possible. It was recognised that some questions could cover more than one concept.

However, it was agreed that each question would only be counted once.

Each question was assigned a ‘score’. When added together, an individual’s total score would

indicate whether they had basic, sound or advanced personal financial knowledge.

The questions were divided into those which would feed into the score of financial knowledge and

those which would act as filters to knowledge questions (e.g. ‘Do you know what ‘equity’ means?’) or

descriptors (e.g. demographic or behavioural information helping to describe the respondent). The

scored questions were predominantly given one point for each correct answer. Where multiple

responses were possible, these were given part scores so that the overall score was in line with other

questions of equal value. Each question was identified as measuring either basic or advanced

knowledge, with the majority falling under basic and those tagged advanced being predominantly

investment related questions – for those who have money to invest.

It was agreed that, as financial knowledge reflects each person’s circumstances and experiences,

people should not be disadvantaged because they were not familiar with products and services they

might never use or need (for example, those without the means to invest would not be expected to

know about investing). Therefore, only the questions testing basic knowledge were used to

determine the overall financial knowledge scores. Planning for the future, saving, understanding

mortgages, and budgeting were deemed the most important areas of financial knowledge. The

advanced questions, relating primarily to investment, were scored separately.

Page 15: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 13

The basic knowledge questions had a maximum score of 58.5 and the advanced knowledge questions

had a maximum score of 18.5.

Page 16: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 14

Research methodology

A partnership approach between Colmar Brunton and Te Rūnanga o Ngāi Tahu (Te Rūnanga) was

used in conducting this survey. Colmar Brunton undertook the design of the survey, trained and

supervised the interviewers from Te Rūnanga, processed the data and undertook the analysis and

reporting. The trained members of Ngāi Tahu carried out the interviews.

A total of 400 Ngāi Tahu iwi members aged 18 years or over participated in the research between the

5th of April and the 18th of June 2010. All interviews were conducted face-to-face in nine main

regions.

Questionnaire development

To allow for direct comparisons with the national survey, all financial knowledge questions remained

the same. Changes that were made to existing questions were only made to the demographic

section where necessary (for example, rather than asking about ethnicity we asked about iwi

affiliation).

Two additional questions were asked in this survey to gain understanding of what factors or

situations would lead people to seek financial information and the method in which they prefer to

receive financial information.

Sampling

Interviews were carried out in nine regions (Auckland, Waikato, Hawke’s Bay, Manawatu-Whanganui,

Wellington, West Coast, Canterbury, Otago, and Southland), approximately in proportion to the size

of each region (defined by the total number of Ngāi Tahu members in the region).

Sampling was undertaken using a list of Ngāi Tahu iwi members aged 18 years or over that was

provided by Te Rūnanga and potential respondents were randomly selected from this list based on

the region they live in.

Each potential respondent was sent a letter which outlined the purpose and the benefit of the study

and explained what would be involved if they took part. They were then phoned by a member of Te

Rūnanga to determine willingness to participate in the study. Once willingness was established,

interviewers made arrangements with each respondent to organise a suitable time and venue for the

face-to-face interview.

Participants were given a koha as a ‘thank you’ for their help in this study.

Fieldwork

All fieldwork for this study was managed and conducted by Te Rūnanga with the guidance of Colmar

Brunton. Interviewers were recruited by Te Rūnanga and trained by a Colmar Brunton supervisor

specifically for this project. To provide support and feedback on interviewing techniques, Colmar

Brunton supervisors viewed some of the initial interviews conducted.

Weighting

To ensure the data reflects the characteristics of the population of interest, the data have been

weighted by Whai Rawa membership (Te Rūnanga’s saving initiative).

Page 17: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 15

Estimated sampling errors

The following table provides estimated margins of error associated with various survey results at a

total sample size level. The calculations assume simple random sampling and have been calculated

at the 95% confidence level. Sub-group analyses carry higher margins of error.

Table A: Estimated sampling errors

Survey result (%) Margin of error associated with survey (n=400)

Margin of error when comparing results between Ngāi Tahu and New Zealand survey (n=400 and

n=850 respectively)

10% or 90% +/-2.9% +/-3.6%

20% or 80% +/-3.9% +/-4.8%

30% or 70% +/-4.5% +/-5.4%

40% or 60% +/-4.8% +/-5.8%

50% or 50% +/-4.9% +/-5.9%

All differences commented on within the written commentary of this report are statistically significant

at the 95% confidence level (unless otherwise stated). Further, all statistically significant differences

with the national results are denoted with an arrow in the graphs.

Page 18: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 16

Detailed findings

Financial knowledge groups

Both the national survey of New Zealanders, and the Ngāi Tahu survey, used a constructed financial

knowledge score (FKS), which involved grouping respondents by their level of knowledge into three

categories (tritiles) as follows:

� Low knowledge – FKS of less than 37.25

� Medium knowledge – FKS of 37.25 to 44

� High knowledge – FKS of 44 to 58.5.

Because the same definition was used in both surveys we can compare Ngāi Tahu’s financial

knowledge with that of New Zealand (the national average). For example, the analysis that follows

assesses whether the size of the Low knowledge groups in the two surveys differs by comparing the

proportion of Ngāi Tahu’s population who had a financial knowledge score of less than 37.25 in 2010

with the proportion of New Zealand’s population who had a financial knowledge score of less than

37.25 in 2009.

In addition to these three groups, we also looked at those at both ends of the knowledge scale; those

who scored 28.25 or less on the basic knowledge questions (Lowest knowledge group) and those

who scored 15 or more out of a possible 18.5 on the advanced knowledge questions (Advanced

knowledge group). The advanced knowledge points were assigned to questions where it was

expected that a higher level of financial knowledge would be needed. Those questions that were

defined as advanced were predominantly investment related questions – for those who have money

to invest. Again, to allow for direct comparisons to be made, the 2009 national survey definitions

were used to construct the Lowest knowledge group and the Advanced knowledge group using the

Ngāi Tahu survey data.

Page 19: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 17

Low, Medium and High knowledge groups

The sizes of the three knowledge groups (Low, Medium and High) are illustrated in the following

chart for both the Ngāi Tahu survey and the national survey.

Size of financial knowledge groups

29% 31%

31% 26%

40% 43%

0%

20%

40%

60%

80%

100%

Ngai Tahu New Zealand

Low Knowledge Medium Knowledge High Knowledge

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)

While the results between Ngāi Tahu and the national survey are quite similar, the proportion of Ngāi

Tahu that fall into the Medium knowledge group is slightly larger (31% of Ngāi Tahu are in the

Medium knowledge group compared to 26% of New Zealanders) and this is drawn relatively evenly

from both the High and Low knowledge groups. This difference is significant at the 90% confidence

level.

Demographic profile of knowledge groups

Tables B and C profile the demographic groups by the three knowledge groups. The data contains

row percentages. An example of how the data should be interpreted is as follows. Thirty-eight

percent of males and 41% of females are in the High knowledge group.

• The figures in green denote where the results from the Ngāi Tahu survey are significantly

higher than the national average.

The figures in red denote where the results from the Ngāi Tahu survey are significantly lower than

the national average.

Key patterns in the data are as follows:

� Slightly more females than males are in the High knowledge group (compared to the national survey where more males fell into the High knowledge group).

� Those aged 35-64 years tend to have the highest knowledge, which is consistent with the national survey. However, males aged 35-44 years and females aged 45-54 years are significantly less likely than the national average to be in the High knowledge group.

Page 20: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 18

� Those with higher education tend to have higher levels of financial knowledge.

� Home owners have higher financial knowledge than renters. However, when compared to the national results, there are significantly less home owners in the High knowledge group and more in the Medium knowledge group.

� 45% of those in paid employment are in the High knowledge group compared to only 28% of those who are not in paid employment.

� Financial knowledge tends to increase with income (both household income and personal income).

� While levels of financial knowledge tend to increase with net worth, those with a net worth ranging from negative to $100,000 are less likely than the national average to be in the Low knowledge group and more likely to be in the Medium knowledge group.

� Those who live in Auckland, Wellington, and Otago tend to have higher levels of financial knowledge.

� 45% of Whai Rawa members are in the High knowledge group compared to only 36% of non-members.

Page 21: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 19

Table B: Profile of demographic groups by knowledge

Sample Size Low knowledge Medium

knowledge

High knowledge Demographic categories

Ngāi Tahu n=

New Zealand n=

Ngāi Tahu %

New Zealand

%

Ngāi Tahu %

New Zealand

%

Ngāi Tahu %

New Zealand

%

Total respondents 400 850 29 31 31 26 40 43

Gender Males 196 366 31 28 31 27 38 46

Females 204 484 27 34 32 26 41 40

Age 18-24 23* 83 51 57 28 25 21 18

25-34 49 116 31 37 37 30 32 33 35-44 99 166 20 20 35 23 46 57 45-54 98 160 25 15 33 25 43 60 55-64 71 145 19 21 36 27 45 53 65+ 55 180 49 44 20 28 31 29

Age by gender Males 18-34 32 81 47 46 30 29 23 26 Males 35-44 44 72 19 17 42 20 39 64

Males 45-54 47 66 23 10 29 28 48 61 Males 55-64 39 66 21 16 35 25 44 59 Males 65+ 32 81 47 37 21 30 31 33 Females 18-34 40 118 31 45 37 27 32 28 Females 35-44 55 94 20 23 28 26 52 52

Females 45-54 51 94 26 20 36 22 38 58 Females 55-64 32 79 16 25 38 29 46 47 Females 65+ 23* 99 51 49 18 25 30 25

Education Primary or basic secondary education 110 205 46 53 32 28 22 18

Secondary school qualification (only) 93 197 31 34 33 30 36 37

Tertiary or post-graduate education 193 441 17 20 31 24 52 56

Home ownership

Owned by self/partner 209 437 19 22 33 22 48 57

In a trust 27* 76 21 16 24 36 55 48 Rented 146 286 42 44 33 28 25 28

Employment In paid employment 276 507 20 22 34 26 45 52 Not in paid employment 120 343 48 46 25 26 28 28

Household income

$50,000 or less 140 389 50 47 27 26 24 28

$50,001 to $100,000 142 205 15 14 38 30 47 56

More than $100,000 90 146 7 9 30 20 63 71

Personal income

$10,000 or less 40 79 34 58 28 20 38 22

$10,001 to $20,000 66 174 59 44 27 22 15 34

$20,001 to $30,000 50 130 37 33 19 28 44 39

$30,001 to $40,000 32 75 22 31 38 33 40 37

$40,001 to $50,000 60 80 23 7 46 43 31 51

$50,001 to $70,000 54 87 8 9 42 26 49 65

$70,001 to $100,000 50 67 4 13 27 19 69 69

More than $100,000 23* 37 3 9 19 13 78 78

Net worth Negative net worth to $100,000 49 355 24 43 41 26 34 32 $101,000 to $300,000 net worth 259 166 36 32 30 26 34 42 $301,000 to $600,000 net worth 58 195 16 22 33 26 51 52 $601,000 plus net worth 34 134 4 8 25 28 71 65

Note: Any groups where the base is less than n=20 are not included in this table.

*Caution: Small base size

Page 22: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 20

Table C: Profile of regions by knowledge

Sample Size Low knowledge

Medium knowledge

High knowledge

Demographic categories

Ngāi Tahu n=

Ngāi Tahu %

Ngāi Tahu %

Ngāi Tahu %

Total respondents 400 29 31 40

Region Auckland 45 15 38 47

Waikato 31 49 13 38

Hawkes Bay 20* 43 32 25

Manawatu-Whanganui 20* 29 34 38 Wellington 45 29 21 50 West Coast 10* 46 22 33 Canterbury 150 31 32 37 Otago 39 15 33 52 Southland 40 29 44 27

Whai Rawa membership Member 205 21 34 45 Non-member 195 34 30 36

*Caution: Small base size

Profile of knowledge groups by product ownership

Table D profiles the three knowledge groups by product ownership. The data contains column

percentages. An example of how the data should be interpreted is as follows. Ninety-three percent

of the High knowledge group have a cheque/transaction/current account.

Key patterns evident in the data are as follows:

� Across most of the financial products, ownership is highest among the High knowledge group and lowest among the Low knowledge group, except for having a personal loan and government student loan.

� As with the national results, take up of KiwiSaver correlates positively with higher financial knowledge.

� There are a number of significant differences in product ownership across the knowledge groups when comparing Ngāi Tahu to the national average. Ngāi Tahu are less likely to own the following products:

- high interest call account; this is driven by particularly low ownership levels among the Low knowledge group

- term deposit/call account

- credit card; this is driven by particularly low ownership levels among the High knowledge group.

Ngāi Tahu are more likely than the national average to own the following products:

- unit trust/managed fund; this is driven by particularly high ownership levels among the Medium and High knowledge groups

- work based superannuation fund; this is driven by particularly high ownership levels among the Low knowledge group

- personal overdraft; this is driven by particularly high ownership levels among each of the knowledge groups

- lease or hire purchase; this is driven by particularly high ownership levels among the High knowledge group

- house/contents insurance; this is driven by particularly high ownership levels among the Low and Medium knowledge groups

- vehicle insurance; this is driven by particularly high ownership levels among the Low and Medium knowledge groups.

Page 23: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 21

Table D: Profile of knowledge groups by product ownership

Total sample Low knowledge Medium knowledge

High knowledge Demographic categories

Ngāi Tahu %

New Zealand

%

Ngāi Tahu %

New Zealand

%

Ngāi Tahu %

New Zealand

%

Ngāi Tahu %

New Zealand

%

Sample size n= 400 850 109 259 128 225 163 366

Cheque/transaction/current a/c 90 87 89 74 87 87 93 97 Savings account 82 85 66 79 87 85 89 89 High interest call account 11 17 2 8 10 10 20 27 Term deposit/term investment 22 28 12 18 21 28 30 34 Unit Trust/Managed fund 16 11 5 4 15 7 25 17 Other deposit accounts 17 17 9 10 22 17 18 22 Shares 18 22 7 8 18 22 25 31 KiwiSaver 34 29 24 17 36 31 41 36 Work based superannuation 20 14 13 4 20 13 26 22

Personal retirement savings / superannuation

21 18 12 9 23 20 25 23

Mortgage/loan on home live in/holiday home

32 27 12 10 33 24 45 41

Mortgage/loan on other properties owned

10 10 5 3 11 6 13 17

Personal loan 19 17 17 14 25 23 15 15 Personal overdraft 35 23 29 16 38 25 38 26 Revolving credit 8 8 5 1 5 6 14 14 Government student loan 18 15 18 13 20 18 18 14 Credit cards 60 66 31 37 64 70 76 84 Store cards 29 24 18 13 31 29 36 29 Lease or hire purchase 21 15 17 15 22 14 24 16 House/contents insurance 79 69 61 42 82 71 90 86 Vehicle insurance 80 73 59 47 87 79 89 89 Private health insurance 43 40 26 24 44 38 55 53

Page 24: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 22

Lowest and Advanced knowledge group

The next chart shows the sizes of the Lowest and Advanced knowledge groups.

Size of Lowest and Advanced knowledge groups

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)

10%

19%

10%

20%

0% 5% 10% 15% 20% 25%

Lowest knowledge group

Advanced knowledge group

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

One in ten (10%) Ngāi Tahu fall into the Lowest knowledge group while one in five (19%) fall into

the Advanced knowledge group. This is consistent with the national results.

Demographic profile of Lowest and Advanced knowledge groups

Tables E and F profile the demographic groups by Lowest and Advanced knowledge groups. The

data contains row percentages. An example of how the data should be interpreted is as follows.

Twenty-two percent of males, and 16% of females, are in the Advanced knowledge group.

Key findings include:

� A knowledge gap exists between males (higher) and females (lower) in the Advanced knowledge group. However, this gap is less marked compared to the national results.

� Those aged 18-24 and 65 or over tend to have the lowest knowledge, which is consistent with the national results.

� Those aged 45-54 are significantly less likely than the national average to be in the Lowest knowledge group, and males aged 35-44 are significantly less likely than the national average to be in the Advanced knowledge group.

� Those with a net worth ranging from negative to $100,000 are significantly less likely than the national average to be in the Lowest knowledge group.

� High proportions of those who live in the Waikato, Manawatu-Whanganui, and the West Coast are in the Advanced knowledge group.

� 22% of Whai Rawa members are in the Advanced knowledge group compared to only 17% of non-members.

Page 25: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 23

Table E: Profile of demographic groups by Lowest and Advanced knowledge groups

Sample Size Lowest knowledge Advanced knowledge Demographic categories

Ngāi Tahu n=

NZ n=

Ngāi Tahu %

NZ %

Ngāi Tahu %

NZ %

Total respondents 400 850 10 10 19 20

Gender Males 196 366 10 8 22 27

Females 204 484 9 12 16 14

Age 18-24 23* 83 31 29 8 11 25-34 49 116 11 10 10 14 35-44 99 166 7 4 18 27 45-54 98 160 1 7 26 30 55-64 71 145 5 5 20 24 65+ 55 180 20 12 17 12

Age by gender Males 18-34 32 81 17 14 11 16 Males 35-44 44 72 5 4 16 38

Males 45-54 47 66 3 1 35 34 Males 55-64 39 66 9 4 25 30 Males 65+ 32 81 18 14 18 22 Females 18-34 40 118 19 22 8 10 Females 35-44 55 94 8 5 19 16 Females 45-54 51 94 - 11 17 26

Females 55-64 32 79 - 6 14 18 Females 65+ 23* 99 23 11 15 4

Education Primary or basic secondary 110 205 15 18 6 7

Secondary school qualification (only) 93 197 13 17 16 17 Tertiary or post-graduate education 193 441 5 4 28 26

Home ownership

Owned by self/partner 209 437 3 5 29 26

In a trust 27* 76 10 7 16 26

Rented 146 286 15 16 8 13

Employment In paid employment 276 507 5 6 21 25 Not in paid employment 120 343 18 17 14 12

Household income Less than $50,000 140 389 18 16 10 10

$50,001 to $100,000 142 205 4 2 20 28

More than $100,000 90 146 2 - 36 37

Personal income

$10,000 or less 40 79 13 24 15 7

$10,001 to $20,000 66 174 17 13 7 12

$20,001 to $30,000 50 130 12 10 20 18

$30,001 to $40,000 32 75 10 7 14 17

$40,001 to $50,000 60 80 9 - 16 22

$50,001 to $70,000 54 87 1 2 22 37

$70,001 to $100,000 50 67 - - 31 35

More than $100,000 23* 37 - 2 61 48

Net worth Negative net worth to $100,000 49 355 2 17 11 13 $101,000 to $300,000 net worth 259 166 13 9 14 18 $301,000 to $600,000 net worth 58 195 7 6 32 23 $601,000 plus net worth 34 134 - 1 52 39

Note: Any groups where the base is less than n=20 are not included in this table.

*Caution: Small base size

Page 26: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 24

Table F: Profile of regions by Lowest and Advanced knowledge groups

Sample size Lowest knowledge

Advanced knowledge

Demographic categories

Ngāi Tahu n=

Ngāi Tahu %

Ngāi Tahu %

Total respondents 400 10 19

Region Auckland 45 5 17

Waikato 31 13 28

Hawkes Bay 20* 6 9 Manawatu-Whanganui 20* 7 34 Wellington 45 13 19 West Coast 10* - 33 Canterbury 150 11 17 Otago 39 12 23 Southland 40 8 11

Whai Rawa membership

Member 205 6 22 Non-member 195 12 17

*Caution: Small base size

Profile of knowledge groups by product ownership

Table G profiles the Lowest and Advanced knowledge groups by product ownership. The data

contains column percentages. An example of how the data should be interpreted is as follows.

Ninety-seven percent of those with Advanced knowledge have a cheque/transaction/current account.

Key findings include:

� Across most of the financial products, ownership is particularly low among the Lowest knowledge group and particularly high among the Advanced knowledge group. The main exception to this is government student loans.

� There are a number of significant differences in product ownership across the Lowest and Advanced knowledge groups when comparing the Ngāi Tahu results with the national average. Compared to the national average, a significantly smaller proportion of the Advanced knowledge group have shares, while significantly larger proportions have insurances (for both house/contents and for vehicles). The incidence of owning a cheque/transaction/current account for those in the Lowest knowledge group is higher than the national average.

Page 27: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 25

Table G: Profile of Lowest and Advanced knowledge groups by product ownership

Lowest knowledge Advanced knowledge Demographic categories

Ngāi Tahu %

New Zealand %

Ngāi Tahu %

New Zealand %

Sample size n= 35 84 78 167

Cheque/transaction/current a/c 95 75 97 97 Savings account 62 68 88 90 High interest call account - 5 26 29 Term deposit/term investment 15 10 34 34 Unit Trust/Managed fund 2 3 23 22 Other deposit accounts 7 11 23 21 Shares 7 8 25 40 KiwiSaver 7 15 45 40 Work based superannuation 12 3 33 28 Personal retirement savings /

superannuation 3 6 29 29

Mortgage/loan on home live in/holiday home

7 5 54 42

Mortgage/loan on other properties owned

5 - 18 15

Personal loan 7 6 12 15

Personal overdraft 19 14 40 29 Revolving credit - - 23 16 Government student loan 15 7 11 13 Credit cards 21 21 89 87 Store cards 22 9 30 28 Lease or hire purchase 16 14 17 17 House/contents insurance 41 27 95 88 Vehicle insurance 43 34 95 88 Private health insurance 14 14 63 56

Page 28: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 26

Areas of highest knowledge and lowest knowledge

Table H below provides a summary of the results to the financial knowledge questions and are

ordered from questions where Ngāi Tahu respondents had the highest knowledge to questions where

respondents had the lowest knowledge. Results are shown for the total sample and also according

to Whai Rawa membership status.

Figures in green denote where the results from Whai Rawa members are significantly higher than the

results from non-members.

Table H: Areas of highest knowledge and lowest knowledge

Knowledge area % Correct

All

Ngāi Tahu (n=400)

Whai Rawa members

(n=205)

Non-Whai

Rawa members

(n=195)

Financial plans – understanding that they should take into account possible changes (Q16)

96% 98% 94%

Consumer rights and responsibilities – understanding that telling your friend your password is unwise (Q46)

95% 97% 94%

Financial advice – before investing, it is important to ask the financial advisor about their qualifications and experience Q47)

94% 98% 92%

Financial advice – before investing, it is important to read and understand the

Investment Statement that explains details about the investment (Q47) 94% 95% 94%

Investing – an investment where they promise a very high rate of return with little risk might be a scam (Q45)

92% 93% 91%

Investing – an investment where you are told the offer is only being made to a select few people might be a scam (Q45)

92% 91% 92%

Importance of having a budget in relation to the ability to control money (Q11) 92% 97% 90%

Financial term – ‘savings’ (Q7) 91% 94% 89%

Mortgages in relation to increasing the amount of regular payments (Q20) 91% 94% 89%

Investing – understanding that a higher than average return is likely to have

higher than average risk (Q40a) 90% 93% 89%

Financial records – how much had at end of month (Q2a) 90% 91% 89%

Investing – understanding that even with good share investments, in the short

term the value can usually be expected to go up and down (Q40b) 88% 92% 86%

Tax – gross salary is before a person is taxed (Q9) 88% 91% 87%

Managing risk – strategic use of insurance (Q25) 87% 90% 85%

Savings – future dollar value (Q29a, 29b) 87% 88% 87%

Savings – interest earned (Q32) 85% 85% 85%

Retirement – NZ superannuation entitlement age (Q36) 85% 85% 86%

Financial plans – understanding that they can change throughout life (Q16) 85% 91% 82%

Financial plans – understanding that investments are only part of it (Q16) 85% 89% 83%

Managing risk – entitlement to share of house when two people separate after four years (Q26)

84% 91% 80%

Retirement planning – consider retirement spending/lifestyle factors (Q35) 83% 83% 83%

Credit cards – money is still owed if only minimum amount paid (Q4) 83% 84% 83%

Mortgages in relation to minimising interest by putting some payments on a credit card and paying it off every six months (Q20)

83% 86% 81%

Financial term – ‘term deposit’ (Q7) 82% 86% 79%

Investing – change from high risk to low risk investments (Q44) 82% 84% 82%

Debt management in relation to the responsibility of the guarantor (Q18) 82% 84% 81%

Maths and standard literacy in relation to savings (Q27) 82% 87% 78%

Financial records – whether saving this month (Q2b) 81% 85% 78%

Mortgages, in particular that with a fixed interest rate home loan the interest rate remains the same for the term of the loan (Q24)

80% 81% 80%

Page 29: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 27

Knowledge area (continued) % Correct

All

Ngāi Tahu (n=400)

Whai Rawa members

(n=205)

Non-Whai Rawa

members

(n=195)

Investing – an investment offered by a well known, reputable financial organisation is not likely to be a scam (Q45)

80% 80% 79%

Budget – everyone can benefit (Q12) 80% 80% 80%

Budget – planning for what you earn and what you spend (Q10) 79% 82% 77%

Consumer rights and responsibilities – understanding that telling a bank staff member your internet banking password is unwise (Q46)

79% 82% 77%

Mortgages in relation to equity and leveraging - borrowing against the value in an existing property (Q22)

77% 75% 77%

Financial term – ‘asset’ (Q7) 76% 83% 72%

Financial advice – before investing, it is important to find out how a financial advisor is being paid (Q47)

76% 80% 74%

Savings – real interest rate (Q33) 76% 78% 75%

Investing – should take into account risk of investment (Q43) 73% 80% 69%

Debt management in relation to reducing debt (Q30) 70% 68% 71%

Mortgages in relation to fixed, floating, variable home loans (Q23) 70% 70% 69%

Financial term – ‘secured loan’ (Q17b) 69% 79% 64%

Financial advantage of withdrawing cash when making EFTPOS purchases (Q3) 69% 77% 65%

Financial term – ‘capital gain’ (Q7) 68% 72% 66%

Investing – reduce risk by diversifying their investment portfolio and have a variety of investments (Q44)

66% 76% 61%

Credit cards – interest free days if paid off in full each month (Q4) 66% 67% 65%

Investing – should take into account return of investment (Q43) 64% 69% 61%

Financial term – ‘liability’ (Q7) 64% 67% 62%

Investing – an investment where the minimum amount to invest keeps reducing might be a scam (Q45)

62% 61% 62%

Financial term – ‘equity’ (Q21b) 61% 66% 58%

Financial records – amount saved on bank statement (Q2c) 60% 70% 54%

Investing – not only invest in property (Q44) 59% 64% 55%

Financial term – ‘net worth’ (Q8b) 58% 57% 59%

Debt management in relation to getting rid of debt faster (Q19) 57% 57% 56%

NZ Superannuation – understanding that it is not asset tested (Q39) 56% 57% 56%

Financial term – ‘rate of return’ (Q7) 56% 63% 52%

Importance of having a budget in relation to the ability to plan (Q11) 56% 60% 53%

Retirement planning – consider current financial situation (Q35) 55% 58% 54%

NZ Superannuation – understanding that it is not income tested (Q38) 54% 52% 55%

Mortgages, in particular that with a variable or floating rate home loan a person can repay in part or in full at any time without penalty (Q24)

54% 54% 54%

Maths and standard literacy in relation to bank statements (Q2d) 53% 60% 48%

Financial advantage of internet banking includes cheaper costs/no fees (Q5) 52% 60% 48%

Mortgages in relation to minimising interest by paying half a monthly payment every fortnight (Q20)

51% 53% 51%

Investing – understanding that an investment scheme with a return higher than average is probably too good to be true (Q41)

51% 50% 52%

Importance of having a budget in relation to the ability to track money (Q11) 48% 46% 49%

Retirement planning – consider retirement income (Q35) 47% 47% 47%

Investing – reduce risk by taking out capital guaranteed investments (Q44) 46% 51% 43%

Savings – compound interest on term deposits (Q31) 43% 50% 38%

Consumer rights and responsibilities – understanding that telling your partner your password is unwise (Q46)

42% 40% 44%

Financial advantage of paying bills on time include qualifying for discount (Q6b) 41% 49% 37%

Financial advantage of paying bills on time includes avoiding being charged interest (Q6b)

37% 39% 36%

Page 30: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 28

Knowledge area (continued) % Correct

All

Ngāi Tahu (n=400)

Whai Rawa members

(n=205)

Non-Whai Rawa

members

(n=195)

Retirement – after tax amount of NZ superannuation (Q37) 35% 34% 36%

Retirement planning – consider length of retirement (Q35) 33% 38% 31%

Investing – understanding that a range of shares is likely to make the most money over the next 18 years (Q42)

30% 36% 26%

Mortgages in relation to a revolving credit facility loan (Q24) 28% 32% 26%

Savings – compound interest on savings account (Q28a, Q28b) 28% 34% 25%

Investing – should take into account duration of investment (Q43) 27% 34% 23%

Investing – should take into account liquidity of investment (Q43) 26% 34% 22%

Investing – should take into account cost of investment (Q43) 22% 29% 18%

Financial advantage of paying bills on time includes maximising the interest earned (Q6b)

11% 10% 11%

Page 31: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 29

Behaviours

Savings behaviour

Respondents were asked:

Q50) Which one of the following statements best applies to you?

Savings statement that best applies

42%

26%

15%

13%

3%

1%

49%

22%

14%

10%

4%

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

I save money on a regular basis

I sometimes save money

I can’t save, there’s never enough money

I save only when I want to save up for something big or special

I don’t save because I don’t need to

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q50

Missing information

While four in ten (42%) Ngāi Tahu respondents said that they save money on a regular basis, this is

significantly less than the New Zealand national average where just under half (49%) said that they

save regularly.

The remaining responses do not vary significantly from the national average with 26% of Ngāi Tahu

respondents saying that they sometimes save money, 15% saying that they can’t save because

there’s never enough money, and 13% saying they save only when they want to save up for

something big or special. A further 3% of respondents said that they don’t save because they don’t

need to.

Page 32: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 30

Control of expenses

To establish how people control their expenses, respondents were asked:

Q51) Which one of the following best describes the extent to which you control your

expenses?

37%

31%

19%

12%

39%

34%

22%

5%

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Which best describes how they control their expenses

Without keeping written records, I keep a fairly close eye on expenses

I use written or electronic records to keep a close eye on expenses

I keep my eye on expenses a bit

I don’t keep my eye on expenses at all

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q51

Two thirds of Ngāi Tahu respondents said that they keep a close eye on expenses with just over a

third (37%) saying they keep a fairly close eye on expenses without keeping written records, and just

under a third (31%) saying that they keep a close eye on expenses using a written or electronic

record. One in five (19%) said that they keep an eye on their expenses ‘a bit’. However, one in ten

said that they don’t keep an eye on their expenses at all and this is significantly higher than the

national average (12% of Ngāi Tahu c.f. 5% of New Zealanders).

Page 33: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 31

Greatest difficulty with money

Respondents were asked several questions to establish what difficulties they have in managing

money.

Q54a) Would you say that generally you have difficulty managing your money?

Q54b) What would you say is your greatest difficulty in managing your money?

Q54c) What other difficulties do you have?

The last two questions were asked of respondents who said they have difficulty managing their

money (Q54a).

The chart below presents the findings to these questions. In the graph on the right, the percentage

at the end of each bar gives the proportion of respondents who mentioned that difficulty at all (either

in response to Q54b or Q54c).

Difficulties in managing money

Base: All respondents Ngai Tahu (n=400)Source: Q54a

14%85%

Yes No

Base: Respondents who generally have difficulty managing their money Ngai Tahu (n=56). NB: Top six difficulties mentioned.

Source: Q54b, Q54c

36%

31%

4%

6%

3%

2%

0% 20% 40% 60%

Greatest difficulty Other difficulties

Whether having difficulty managing

money

Difficulties experienced

In 2009, 16% of New Zealanders said they have difficulty managing

money.

Base: All respondents (n=850)Source: Q54a

50%

40%

16%

16%

16%

14%

Don’t have/earn enough money

Can’t control own behaviour/budget

Increasing prices/inflation

Family commitments/expenses

Usual monthly bills

Unexpected bills/expenses

Reasons for this included not having/earning enough money (49%), unable to control own behaviour/budget (40%), unexpected

bills/payments (27%), family commitments/expenses (17%), and usual monthly bills (11%).

Base: NZ respondents who generally have difficulty managing their money (n=134)Source: Q54b, Q54c

Fourteen percent of Ngāi Tahu respondents said that they have difficulties managing their money,

which is consistent with the national average.

Of the respondents who said that they have difficulty managing their money, the most common

explanations given were that they don’t have or earn enough money (50% commented on this

difficulty with 36% describing this as their greatest difficulty), and that they have a lack of self control

in regard to spending and budgeting (40% commented on this difficulty with 31% describing this as

their greatest difficulty). To a lesser extent, increases in prices, family commitments, usual monthly

bills, and unexpected expenses were also mentioned.

While most of these key difficulties were also mentioned as key difficulties in the national survey,

increases in prices ranked much higher in the Ngāi Tahu survey. The increased financial pressures

Page 34: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 32

experienced by many during the recent economic recession may be a contributing factor to this

difference.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the Advanced knowledge group are significantly less likely

than those in the Lowest knowledge group to say that they have difficulties managing money (1% of

the Advanced knowledge group c.f. 24% of the Lowest knowledge group).

Similarly, those in the High knowledge group are significantly less likely than those in the Low and

Medium knowledge groups to say that they have difficulties managing money (4% of the High

knowledge group c.f. 21% of the Low knowledge group and 20% of the Medium knowledge group).

Page 35: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 33

Attitudes

Attitudes towards financial matters

To measure people’s attitudes towards financial matters, respondents were asked to agree or

disagree with a series of statements:

Q53) Please read each of the statements on the showcard and tell me whether you agree or

disagree with each of the statements.

Financial attitudes

Base: All respondents Ngai Tahu (n=400) New Zealand (850) Source: Q53

90%

91%

85%

85%

82%

88%

75%

75%

69%

72%

59%

72%

52%

57%

51%

57%

33%

26%

28%

21%

25%

26%

3

3

5%

4%

6%

4%

6%

7%

18%

12%

15%

9%

21%

16%

37%

33%

44%

48%

27%

32%

48%

47%

1

1

1

1

1

1

1

1

3

2

2

2

3

4

1

1

1

1

7

11

3

2

1

1

1

1

0% 20% 40% 60% 80% 100%

Total agree Neither/Nor Total disagree Don't know/ understand Missing information

It is important to shop around to get the best deal for financial products and services

I believe I am personally responsible for my financial

future

It is important to have a current will

I feel confident about managing my financial affairs

I know what insurance I need to cover my needs

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Investing is a way to achieve financial goals

If I had a major loss of income I could manage for 3

months

If I were investing I would take into account ethical,

environmental and social factors when deciding

where to invest

I have worked out how much I need for my

retirement

I think I manage OK, but some of the financial

decisions made by other members of my family are not so good

People with KiwiSaver will have an adequate

retirement income

Page 36: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 34

Financial attitudes (continued)

Base: All respondents Ngai Tahu (n=400) New Zealand (n=850) Source: Q53

24%

16%

22%

22%

20%

22%

13%

7%

7%

10%

4

9%

59%

67%

59%

58%

57%

55%

69%

76%

81%

79%

87%

80%

2

4

1

1

0% 20% 40% 60% 80% 100%

Total agree Neither/Nor Total disagree Don't know/ understand Missing information

I find it hard to make ends meet because there is not enough money

I spend all my income as I get it

I find that I have to borrow short term to make ends meet

I feel out of control with my borrowing and debt generally

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Because of NZ Superannuation I don’t need to save for retirement

I don’t really plan for the future

Comparisons between Ngāi Tahu and the national average

When comparing Ngāi Tahu to the national average, Ngāi Tahu are more likely to agree with the

following statements:

� I think I manage OK, but some of the financial decisions made by other members of my family are not so good (33% of Ngāi Tahu c.f. 26% of New Zealanders)

� I spend all my income as I get it (24% of Ngāi Tahu c.f. 16% of New Zealanders)

� People with KiwiSaver will have an adequate retirement income (28% of Ngāi Tahu c.f. 21% of New Zealanders)

� Because of NZ Superannuation I don’t need to save for retirement (13% of Ngāi Tahu c.f. 7% of New Zealanders).

The comparatively high proportion of Ngāi Tahu respondents that are KiwiSaver members (discussed

later in this report), may have influenced the above difference in attitudes towards KiwiSaver.

Ngāi Tahu are less likely than average to agree with the following statements:

� I believe I am personally responsible for my financial future (82% of Ngāi Tahu c.f. 88% of New Zealanders)

� Investing is a way to achieve financial goals (59% of Ngāi Tahu c.f. 72% of New Zealanders)

� If I had a major loss of income I could manage for 3 months (51% of Ngāi Tahu c.f. 57% of New Zealanders)

� I feel out of control with my borrowing and debt generally (4% of Ngāi Tahu c.f. 9% of New Zealanders).

In addition to the above, Ngāi Tahu are also more likely than average to disagree with the following

statements:

Page 37: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 35

� I know what insurance I need to cover my needs (18% of Ngāi Tahu c.f. 12% of New Zealanders)

� If I were investing I would take into account ethical, environmental and social factors when deciding where to invest (21% of Ngāi Tahu c.f. 16% of New Zealanders).

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the Low knowledge group are significantly more likely to

agree with almost all the negative financial attitudinal statements, and are significantly less likely to

agree with almost all the positive financial attitudinal statements, when compared to the High

knowledge group4.

A similar pattern is evident when comparing the Lowest knowledge group and the Advanced

knowledge group but to a stronger degree5.

4 The exceptions to this, where the differences are weaker between the groups, are for the statements ‘I have worked out how much I need for my retirement’ and ‘I think I manage OK, but some of the financial decisions made by other members of my

family are not so good’.

5 Exceptions to this are the following attitudinal statements: ‘I feel confident about managing my financial affairs’, ‘I have worked out how much I need for my retirement’, and ‘I think I manage OK, but some of the financial decisions made by other

members of my family are not so good’.

Page 38: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 36

Perceptions of control over life

Respondents were asked a general question about their perceptions of control over their life. They

were asked:

Q59) How much do you agree or disagree with the following statements?

a) My life is determined by my own actions

b) My life is determined by things beyond my control

c) My life is controlled by the actions of other people.

79%

8%

5%

18%

31%

25%

1

20%

17%

1

23%

27%

17%

27%

0% 20% 40% 60% 80% 100%

Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree

My life is determined by my own actions

My life is determined by things beyond my control

My life is controlled by the actions of other people

Perceptions of control over your life

Base: All respondents Ngai Tahu (n=400)Source: Q59Note: Results from the 2009 national financial knowledge survey are not publicly available.

Over three quarters (79%) of Ngāi Tahu respondents strongly agree that their life is determined by

their own actions, and less than one in ten (8%) strongly agree that life is determined by things

beyond their control. Only a very small proportion of respondents (5%) strongly agree that their life

is controlled by the actions of other people.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the Lowest knowledge group are significantly less likely than

those in the Advanced knowledge group to agree (nett) that their life is determined by their own

actions (85% of the Lowest knowledge group c.f. 98% of the Advanced knowledge group).

Similarly, those in the Low knowledge group are significantly less likely than those in the High

knowledge group to agree (nett) that their life is determined by their own actions (93% of the Low

knowledge group c.f. 100% of the High knowledge group).

Page 39: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 37

Current financial situation

Indicators of financial strain

The following question was asked to provide an indication of financial strain:

Q52) In the last 12 months, have any of the following happened to you [or your partner]?

(A list of the following statements were shown using showcards.)

a) Couldn’t keep up with payments for electricity or gas

b) Couldn’t keep up with payments for mortgage or rent

c) Couldn’t keep up with payments for hire purchase or credit cards

d) You borrowed money from family or friends

e) You received help in the form of food from community organisations

f) You sold something out of necessity because you really needed the money

g) You were gifted money from family and friends6.

19%

12%

12%

9%

8%

5%

0% 5% 10% 15% 20% 25%

You borrowed money from family or friends

Couldn't keep up with payments for hire purchase or credit cards

Couldn't keep up with payments for electricity or gas

Couldn't keep up with payments for mortgage or rent

You sold something out of necessity because you really needed the money

You received help in the form of food from community organisations

Indicators of financial strain

Base: All respondents Ngai Tahu (n=400)Source: Q52Note: Results from the 2009 national financial knowledge survey are not publicly available.

In the past 12 months, 38% of Ngāi Tahu respondents have taken some sort of action that indicates

financial strain. Turning to family or friends for financial help is the most common action with 19%

borrowing money from family or friends.

6 26% of respondents said they were gifted money from family and friends. This has not been included in the following

analysis because it was decided at the analysis stage that this category is not necessarily always an indicator of financial strain.

Page 40: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 38

Twenty-four percent of respondents were unable to keep up with some type of payment (for hire

purchases, credit cards, utilities, mortgage, or rent) in the past 12 months.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the Advanced knowledge group are significantly more likely

than those in the Lowest knowledge group to have experienced financial strain in the past 12 months

(22% of the Advanced knowledge group c.f. 55% of the Lowest knowledge group).

Similarly, those in the High knowledge group are significantly less likely than those in the Low and

Medium knowledge groups to have experienced financial strain in the past 12 months (30% of the

High knowledge group c.f. 44% of the Low knowledge group and 41% of the Medium knowledge

group).

Those in the Advanced knowledge group are significantly more likely than those in the Lowest

knowledge group to have struggled in the past 12 months to keep up with payments (9% of the

Advanced knowledge group c.f. 33% of the Lowest knowledge group).

Page 41: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 39

Financial situation compared to 12 months ago

Current financial situation

Respondents were asked the following question about their financial situation:

Q55a) Compared to 12 months ago, would you say that your financial situation is now worse,

about the same, or better?

33%

45%

21%

1%

Better

About the same

Worse

Financial situation compared to 12 months ago

Base: All respondents Ngai Tahu (n=400)Source: Q55aNote: Results from the 2009 national financial knowledge survey are not publicly available.

Don’t know

A third (33%) of Ngāi Tahu respondents said that their financial position was better compared to 12

months ago, just under half (45%) said it was about the same, one in five (21%) said their financial

position was worse, and 1% were unsure.

Page 42: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 40

Factors contributing to worsened financial situation

Respondents were given a list of factors that might contribute to a worsened financial situation.

Respondents were then asked the following questions:

Q55b) Can you please tell me what, if any, of the following have happened to you in the

past 12 months?

Q55c) Is there anything not on this list that has made your financial situation worse in any

way in the past 12 months?

25%

18%

13%

10%

9%

8%

6%

6%

5%

4%

3%

29%

11%

0% 10% 20% 30% 40% 50%

A drop in income/reduced hours

Reduction in value of assets

Illness (not requiring hospitalisation)

Three months or more of being unemployed

A major injury or health problem

Legal costs

Separated from my partner

Being made redundant

A pregnancy/birth of a child

House or garage burgled

Became a solo parent

None of the above

Other

Factors contributing to worsened financial situation

Base: All respondents Ngai Tahu (n=400)Source: Q55b & Q55cNotes: Statements 2% or less not shown. Results from the 2009 national financial knowledge survey are not publicly available.

A drop in income/reduced hours of work (25%) and a reduction in the value of assets (18%) are the

most common situations that have the potential to result in a worsened financial situation.

To a lesser extent, illness (13%) and a period of unemployment (10%) have also been experienced.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the High knowledge group are significantly more likely than

those in the Lowest knowledge group to have experienced a reduction in the value of assets (25% of

the High knowledge group c.f. 10% of the Low knowledge group).

Conversely, those in the Low knowledge group are significantly more likely than those in the High

knowledge group to have experienced the following:

� three months or more of being unemployed (17% of the Low knowledge group c.f. 5% of the High knowledge group)

� being made redundant (11% of the Low knowledge group c.f. 4% of the High knowledge group).

Page 43: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 41

Those in the Advanced knowledge group are significantly more likely than those in the Lowest

knowledge group to have experienced the following:

� a reduction in the value of assets (36% of the Advanced knowledge group c.f. 3% of the Lowest knowledge group)

� legal costs (19% of the Advanced knowledge group c.f. 0% of the Lowest knowledge group).

Conversely, those in the Lowest knowledge group are significantly more likely than those in the

Advanced knowledge group to have experienced three months or more of being unemployed (21% of

the Lowest knowledge group c.f. 3% of the Advanced knowledge group).

Page 44: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 42

Awareness and concern over financial situation

Respondents were asked the following questions:

Q56a) Compared to 12 months ago, would you say that you are now more aware of your

financial situation, less aware, or about the same?

Q56b) Compared to 12 months ago, would you say that you are now more concerned about

your financial situation, less concerned, or about the same?

Base: All respondents Ngai Tahu (n=400)Source: Q56a & Q56bNote: Results from the 2009 national financial knowledge survey are not publicly available..

47%

33%

51%

55%

1

10% 12

0% 20% 40% 60% 80% 100%

More About the same Less Don't know Missing information

Compared to 12 months ago, would you say that you are now more aware of your financial situation, less aware, or about

the same?

Compared to 12 months ago, would you say that you are now more concerned

about your financial situation, less concerned, or about the same?

Awareness and concern over financial situation compared to 12 months ago

Nearly half (47%) of respondents said that they are currently more aware of their financial situation

compared to 12 months ago, 51% said they have the same awareness, and 1% said they are less

aware.

A third (33%) of respondents said they are more concerned about their financial situation compared

to 12 months ago, just over half (55%) said they feel about the same, and 10% said they are less

concerned.

Those who are more aware of their current financial situation are more likely than the Ngāi Tahu

average to be more concerned about their financial situation (48% of those who are more aware c.f.

33% of Ngāi Tahu).

Analysis by knowledge group (among Ngāi Tahu respondents)

Awareness of financial situation

Among Ngāi Tahu respondents, those in the Low knowledge group are significantly more likely than

those in the Medium and High knowledge groups to say that they are now more aware of their

financial situation compared to 12 months ago (61% of the Low knowledge group c.f. 46% of the

Medium knowledge group and 37% of the High knowledge group).

Page 45: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 43

Concern for financial situation

Those in the Lowest knowledge group are significantly less likely than those in the Advanced

knowledge group to say that they are now less concerned about their financial situation compared to

12 months ago (0% of the Lowest knowledge group c.f. 16% of the Advanced knowledge group).

Page 46: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 44

Financial advice

Financial information or advice used in past 12 months

The following question was asked to establish sources of financial information and advice.

Q57) In the past 12 months, which of the following, if any, have provided you with financial

information or advice?

Financial information or advice used in past 12 months

52%

38%

23%

20%

18%

16%

7%

5%

4%

4%

19%

1%

1%

51%

35%

20%

23%

18%

21%

3%

6%

4%

2%

21%

1%

0% 10% 20% 30% 40% 50% 60%

Your bank

Friends/relatives

Websites

Newspapers/magazines/leaflets

Financial Advisor

TV programmes

Budgeting advisory services

Seminar/Course/Ed program

Church

Citizens Advice Bureau

Haven't received any help

Don't know

Missing information

Ngai Tahu

New Zealand

Base: All respondents Ngai Tahu (n=400) New Zealand (n=850) Source: Q57

A separate question (detailed later in this

section) shows that 27% of Ngai Tahu respondents

have used Sorted resources in the last 12

months.

Four in five (79%) Ngāi Tahu respondents have obtained some type of financial information or advice

in the past 12 months. Banks (52%) are the most common source of financial information or advice,

followed by friends and family (38%). As reported on later in this section of the report, 27% of Ngāi

Tahu respondents have used Sorted resources in the last 12 months.

While these results are generally consistent with the national results, Ngāi Tahu respondents are

more likely than the national average to receive financial information or advice from budgeting

advisory services (7% of Ngāi Tahu c.f. 3% of New Zealanders) and less likely than the national

average to receive financial information or advice from TV programmes (16% of Ngāi Tahu c.f. 21%

of New Zealanders).

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, the Lowest knowledge group is significantly more likely than the

Advanced knowledge group to obtain financial information or advice from church (12% of the Lowest

knowledge group c.f. 0% of the Advanced knowledge group).

Conversely, the Advanced knowledge group is significantly more likely than the Lowest knowledge

group to obtain financial information or advice from the following places:

� their bank (57% of the Advanced knowledge group c.f. 25% of the Lowest knowledge group)

Page 47: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 45

� websites (33% of the Advanced knowledge group c.f. 7% of the Lowest knowledge group)

� newspapers/magazines/leaflets (29% of the Advanced knowledge group c.f. 7% of the Lowest knowledge group).

Those in the Low knowledge group are more likely than those in the High knowledge group to obtain

financial information or advice from the following places:

� church (9% of the Low knowledge group c.f. 1% of the High knowledge group)

� budgeting advisory services (12% of the Low knowledge group c.f. 3% of the High knowledge group).

They are also more likely to say that they haven’t received any help in the past 12 months (26% of

the Low knowledge group c.f. 16% of the High knowledge group).

Conversely, those in the High knowledge group are more likely than those in the Low knowledge

group to obtain financial information or advice from the following places:

� their bank (58% of the High knowledge group c.f. 35% of the Low knowledge group)

� a financial advisor (25% of the High knowledge group c.f. 10% of the Low knowledge group)

� websites (35% of the High knowledge group c.f. 9% of the Low knowledge group)

� newspapers/magazines/leaflets (25% of the High knowledge group c.f. 11% of the Low knowledge group).

Page 48: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 46

Factors or situations that would lead to seeking financial advice

To determine the type of factors or situations that would lead individuals to seek financial information

or advice, respondents were asked the following question:

Q57b) What would lead you to seek financial information or advice on managing your

personal finances?

34%

19%

10%

10%

8%

6%

6%

5%

4%

4%

4%

4%

4%

4%

15%

0% 10% 20% 30% 40% 50%

If I struggled to pay bills/had financial difficulties

If I had more money/earned more money

If I was trying to avoid/get out of debt

If I had a loss/decrease of income/experienced unemployment

If I was trying to save for something

If I was buying a house

If there was a death in the family

If I was going to invest

If information or training was simplified/easier to understand

If I was getting married/going to have kids

If someone directed me to the right programme/person to talk to

If I was more confident in my ability to make financial decisions

If information or training was provided close by

I don't know where to start

Don't know

Factors or situations that would lead to seeking financial information or advice

Base: All respondents Ngai Tahu (n=400)Source: Q57bNotes: Statements 3% or less not shown. This question was only asked in the Ngai Tahu Financial Knowledge Survey.

The most common situation that would lead Ngāi Tahu respondents to seek financial information or

advice would be during times of financial strain - if they struggled to pay bills (34%), if they were

trying to avoid/get out of debt (10%), and if they experienced a loss or decrease in income (10%) –

or if they had more money (19%).

Page 49: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 47

Preference for receiving financial information

To gain an understanding of people’s preference for receiving financial information or advice on

managing personal finances, respondents were asked the following question and were provided with

a list of options to choose from:

Q57c) How would you prefer to receive financial information or advice on managing your

personal finances?

50%

39%

37%

25%

19%

19%

18%

18%

18%

17%

9%

6%

4%

1%

3%

2%

3%

0% 10% 20% 30% 40% 50%

Your bank

Family/relatives/friends

Financial advisor

Websites

Budgeting advisory services

Seminar/training course/educational programmes

Marae based learning

Take home work book

Email

Written information

TV programmes

Citizens Advice Bureau

Church

Ngai Tahu

Other

Don't know

None

Preference for receiving financial information or advice on managing personal finances

Base: All respondents Ngai Tahu (n=400)Source: Q57cNote: This question was only asked in the Ngai Tahu Financial Knowledge Survey.

Half (50%) of Ngāi Tahu respondents said that they would prefer to receive financial information or

advice on managing their personal finances via their bank. Two in five (39%) said they prefer to

receive information or advice via family or friends, 37% said via a financial advisor, and a quarter

(25%) said via websites.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the Lowest knowledge group are significantly less likely than

those in the Advanced knowledge group to prefer to receive financial information through the

following channels:

� financial advisors (13% of the Lowest knowledge group c.f. 45% of the Advanced knowledge group

� websites (10% of the Lowest knowledge group c.f. 40% of the Advanced knowledge group)

� email (3% of the Lowest knowledge group c.f. 18% of the Advanced knowledge group)

� written information (7% of the Lowest knowledge group c.f. 27% of the Advanced knowledge group).

Those in the Low knowledge group are significantly less likely than those in the High knowledge

group to prefer to receive financial information through the following channels:

Page 50: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 48

� financial advisors (25% of the Low knowledge group c.f. 45% of the High knowledge group)

� websites (13% of the Low knowledge group c.f. 35% of the High knowledge group)

� email (10% of the Low knowledge group c.f. 24% of the High knowledge group)

� written information (8% of the Low knowledge group c.f. 25% of the High knowledge group)

� TV programmes (5% of the Low knowledge group c.f. 13% of the High knowledge group).

In addition to the above, those in the Low knowledge group are significantly more likely than those in

the High knowledge group to say that they prefer not to receive information (6% of the Low

knowledge group c.f. 0% of the High knowledge group).

Analysis by Whai Rawa membership

Whai Rawa members are significantly more likely than non-members to prefer to receive financial

information through the following channels:

� their bank (57% of Whai Rawa members c.f. 46% of non-members)

� seminar/training courses/educational programmes (26% of Whai Rawa members c.f. 15% of non-members)

Whai Rawa members are significantly less likely than non-members to prefer to receive financial

information through a church (1% of Whai Rawa members c.f. 6% of non-members).

Page 51: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 49

Sorted

To evaluate the awareness and use of Sorted information sources, the following questions were

asked:

I have an example here of some financial information that is available for New Zealanders.

This information is referred to as ‘Sorted’ information and is available in leaflets like this one

and there is also a ‘Sorted’ website.

Q58a) Have you ever read a Sorted booklet or visited the sorted.org.nz website?

If Yes: Q58b) In the last 12 months have you read a Sorted Booklet or visited the

sorted.org.nz website?

The results to both questions are presented in the following chart. Both percentages have been

calculated as a proportion of the total sample.

Base: All respondents Ngai Tahu (n=400) New Zealand (n=850) Source: Q58a and 58b

Read a Sorted booklet or visited Sorted website

43%

27%

34%

24%

0% 10% 20% 30% 40% 50% 60%

Ever

In last 12 months

Ngai Tahu

New Zealand

Four in ten (43%) of Ngāi Tahu respondents have at some point in time read a Sorted booklet or

visited the Sorted website. This is significantly higher than the national average where only a third

(34%) have done so.

Just over a quarter (27%) of respondents have read a Sorted booklet or visited the Sorted website in

the last 12 months, which is consistent with national results.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the Advanced knowledge group (65%) and those in the High

knowledge group (57%) are significantly more likely to have at some point in time read a Sorted

booklet or visited the Sorted website (compared to 9% in the Lowest knowledge group, 22% in the

Page 52: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 50

Low knowledge group, and 46% in the Middle knowledge group – although the latter is only

significant at the 90% confidence level).

Page 53: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 51

Financial product ownership

Products owned

Respondents were asked:

Q95) Can you please tell me which of these you have? (A list of products was shown on a

showcard)

90%

82%

80%

79%

60%

43%

35%

34%

32%

29%

22%

87%

85%

73%

69%

66%

40%

23%

29%

27%

24%

28%

0% 20% 40% 60% 80% 100%

Ngai TahuNew Zealand

Savings account

Cheque/transaction/current a/c

Vehicle insurance

House/contents insurance

Credit Card

Private health insurance

Mortgage/loan on home live in/holiday home

KiwiSaver

Term deposit/term investment

Store Card

Personal overdraft

Product ownership

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q95

21%

21%

20%

19%

18%

18%

17%

16%

11%

10%

8%

18%

15%

14%

17%

15%

22%

17%

11%

17%

10%

8%

0% 20% 40% 60% 80% 100%

Ngai TahuNew Zealand

Shares

Lease or hire purchase

Other deposit accounts

Work based retirement savings/ superannuation

Unit trust/ Managed fund

High interest call account

Mortgage/loan on other properties owned

Government student loan

Revolving credit

Personal loan

Personal retirement savings/superannuation

As with the national survey, the most commonly held products and services owned among Ngāi Tahu

respondents are cheque/transaction/current accounts (held by 90%), and savings accounts (held by

82%).

When compared to the national average, Ngāi Tahu are more likely to have the following:

� vehicle insurance (80% of Ngāi Tahu c.f. 73% of New Zealanders)

� house/contents insurance (79% of Ngāi Tahu c.f. 69% of New Zealanders)

� personal overdraft (35% of Ngāi Tahu c.f. 23% of New Zealanders)

� lease or hire purchase (21% of Ngāi Tahu c.f. 15% of New Zealanders)

� work based retirement savings/superannuation (20% of Ngāi Tahu c.f. 14% of New Zealanders)

� unit trust/managed fund (16% of Ngāi Tahu c.f. 11% of New Zealanders).

Conversely, Ngāi Tahu are less likely to have the following:

� credit card (60% of Ngāi Tahu c.f. 66% of New Zealanders)

� term deposit/term investment (22% of Ngāi Tahu c.f. 28% of New Zealanders)

� high interest call account (11% of Ngāi Tahu c.f. 17% of New Zealanders).

Page 54: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 52

Detailed analysis of product ownership by the knowledge groups is provided in an earlier section

entitled ‘Financial knowledge groups’.

Page 55: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 53

Credit card repayment behaviour

Respondents were asked:

Q96) Do you tend to pay off your credit card in full every month or do you tend to leave

some money owing?

Credit card ownership and repayment

Base: All respondents with a credit card Ngai Tahu (n=247), New Zealand (n=556)Source: Q96

60%

66%

0%

20%

40%

60%

80%

100%

Have Credit Card

Ngai Tahu New Zealand

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q95

50% 48%

68%

31%

0%

20%

40%

60%

80%

100%

In full Leave some owing

Ngai Tahu New Zealand

Proportion with credit card

How pay off

When compared to the national average, a significantly smaller proportion of Ngāi Tahu said that they

have a credit card (60% of Ngāi Tahu c.f. 66% of New Zealanders). Of Ngāi Tahu respondents who

do have a credit card, the proportion who pay it off in full every month is significantly less than the

national average (50% of Ngāi Tahu c.f. 68% of New Zealanders), while those who tend to leave

some owing is significantly higher than the national average (48% of Ngāi Tahu c.f. 31% of New

Zealanders).

Page 56: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 54

Money management

General

Payment methods

Respondents were asked:

Q1) There are many different ways of paying for things such as groceries, your power bill and

your mortgage or home loan. Which of the following payment methods do you yourself use?

Payment methods used

88%

85%

53%

52%

46%

41%

83%

77%

47%

50%

49%

42%

0% 20% 40% 60% 80% 100%

EFTPOS

Cash

Internet Banking

Automatic Payment

Credit Cards

Direct Debit

Ngai Tahu New Zealand

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q1

27%

17%

16%

12%

7%

1%

2%

38%

11%

9%

17%

5%

1%

0% 20% 40% 60% 80% 100%

Cheques

Hire Purchase

Store Cards

Telephone banking

Laybys

Money Orders

Other

Ngai Tahu New Zealand

EFTPOS and cash are the most commonly used payment methods with 88% and 85% of Ngāi Tahu

respondents (respectively) using these. When compared to the national average, the following

payment methods are used by a greater proportion of Ngāi Tahu:

� EFTPOS (88% of Ngāi Tahu c.f. 83% of New Zealanders)

� cash (85% of Ngāi Tahu c.f. 77% of New Zealanders)

� internet banking (53% of Ngāi Tahu c.f. 47% of New Zealanders)

� hire purchase (17% of Ngāi Tahu c.f. 11% of New Zealanders)

� store cards (16% of Ngāi Tahu c.f. 9% of New Zealanders).

Conversely, the following payment methods are used by a significantly smaller proportion of Ngāi

Tahu:

� cheques (27% of Ngāi Tahu c.f. 38% of New Zealanders)

� telephone banking (12% of Ngāi Tahu c.f. 17% of New Zealanders).

Page 57: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 55

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the High knowledge group are significantly more likely than

those in the Low knowledge group to use the following payment methods:

� cheques (34% of the High knowledge group c.f. 20% of the Low knowledge group)

� credit card (64% of the High knowledge group c.f. 22% of the Low knowledge group)

� EFTPOS (92% of the High knowledge group c.f. 81% of the Low knowledge group)

� direct debit (52% of the High knowledge group c.f. 25% of the Low knowledge group)

� automatic payment (62% of the High knowledge group c.f. 40% of the Low knowledge group)

� Internet banking (70% of the High knowledge group c.f. 30% of the Low knowledge group).

These differences are even more pronounced for the Advanced knowledge group and the Lowest

knowledge group, except for EFTPOS where the difference is less marked.

Page 58: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 56

Numeracy

Bank statements

Respondents were asked a series of questions relating to bank statements. Results to the first three

questions (Q2a, Q2b and Q2c) asked are reported later in this section entitled Banking. Results to

the last question (Q2d) are presented below.

Now I’m going to show you an example of a bank statement and I will ask you some

questions about it. Please look closely at this bank statement and can you tell me:

Q2d) How many months would it take them to save another $10,000?

Page 59: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 57

Bank statement – correct: time taken to save another $10,000

Base: All respondents who are aware have saved Ngai Tahu (n=328), New Zealand (n=692)Source: Q2d

65%

74%

0%

20%

40%

60%

80%

100%

Ngai Tahu New Zealand

The correct identification of the time required (13 months/12.5 months) was identified by two thirds

(65%) of the Ngāi Tahu respondents who were asked this question. This is significantly lower than

the national average where three quarters (74%) gave the correct answer.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, knowledge of the correct time required to save is significantly lower

for the Lowest knowledge group where only 7% recognised that savings were made and could

correctly calculate the correct number of months required to save.

Page 60: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 58

Months to save

Respondents were asked a series of questions relating to saving money. They were able to use a

calculator or paper for any questions that required calculation.

Q27) Jane has a job with a take home pay of $1,600 per month. She must pay $400 for rent

and $200 for groceries each month. She also spends $200 per month on transport. If she

budgets $200 each month for clothing, $200 for restaurants and $200 for everything else,

how many months will it take her to save $2,000?

Take home pay $1600 per month -how many months to save $2000?

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q27

• $400 rent

• $200 groceries

• $200 transport

• $200 restaurants • $200 everything else

• $200 clothing

6%

13%

80%

1%

3%

15%

82%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Don’t understand

Don’t know

Other

Correct - 10 months

Ngai Tahu New Zealand

The proportion of Ngāi Tahu respondents (82%) who correctly calculated that it would take Jane ten

months to save $20,000 is consistent with the national results.

Page 61: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 59

Understanding financial terms

Definition of terms

Respondents were asked to match financial terms with definitions:

Q7) I have here one set of cards with different terms on them and another set of cards that

have definitions. There are more definition cards than terms. I would like you to find the

best match between the terms and the definitions.

Correct match of financial terms

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q7

91%

82%

76%

68%

64%

56%

89%

85%

74%

67%

63%

66%

0% 20% 40% 60% 80% 100%

Savings

Term Deposit

Asset

Capital Gain

Liability

Real Rate of Return

Ngai Tahu New Zealand

Ngāi Tahu respondents’ understanding of financial terminology is consistent with the national results

for five of the six terms. Understanding of the financial term ‘real rate of return’ is significantly lower

than average with only 56% of respondents giving the correct definition compared to 66% of New

Zealanders.

The following chart looks at understanding of the financial terms by product ownership.

Page 62: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 60

Correct match of financial terms by ownership

92%

89%

80%

60%

90%

89%

73%

67%

90%

80%

57%

35%

87%

83%

59%

54%

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Have Savings Account

Do not have Savings Account

Have Term Deposit

Have Mortgage on Home Lived in

Have Savings/Investment

Savings

Do not have Term Deposit

Do not have Mortgage on Home Lived in

Do not have Savings/Investment

Term Deposit

Liability

Real Rate of Return

Base: Varies by product ownershipSource: Q7

Ownership of financial products tends to result in a greater understanding of the relevant financial

terms. As discussed previously, the proportion of Ngāi Tahu respondents who had a correct

understanding of the term ‘real rate of return’ is significantly lower than the national average and this

is regardless of product ownership (i.e. among those that have savings/investments, only 60% of

Ngāi Tahu understand the term compared to 67% of New Zealanders; and among those that do not

have savings/investments, only 35% of Ngāi Tahu understand the term compared to 54% of New

Zealanders).

Page 63: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 61

Net worth

Respondents were initially asked:

Q8a) Do you know what the term ‘net worth’ means?

Respondents who said they knew what ‘net worth’ means were presented with a showcard which

included four statements.

Q8b) To know how much wealth you have, you need to measure your net worth. ‘Net worth’

means…

a) The difference between your expenditure (what you spend) and income (what you earn or

receive)

b) The difference between your assets (all that you own) and your liabilities (all that you owe)

c) The difference between your bank borrowings and savings

d) None of the above

Net worth

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q8a

Yes - Know what ‘net worth’ means

Prompted meaning of ‘net worth’

Base: Respondents who stated they knew what ‘net worth’ means Ngai Tahu (n=281), New Zealand (n=588)

Source: Q8b

70% 68%

0%

20%

40%

60%

80%

100%

All respondents

Ngai Tahu New Zealand

83%

9%

86%

8%

0%

20%

40%

60%

80%

100%

Correct - Difference between your assets and your

liabilities

Difference between your expenditure and your income

Ngai Tahu New Zealand

Using both questions, 58% of all Ngai Tahu respondents knew the correct definition

compared to 59% of allNew Zealanders. This

difference is not statistically significant.

Seventy percent of Ngāi Tahu respondents said that they know what the term ‘net worth’ means.

Among these respondents, 83% selected the correct definition of ‘the difference between your assets

(all that you own) and your liabilities (all that you owe)’, while 9% selected the wrong definition ‘the

difference between your expenditure (what you spend) and income (what you earn or receive)’.

As a proportion of all Ngāi Tahu respondents, 58% knew the correct definition of net worth.

All of these results are consistent with the national results.

Page 64: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 62

Gross salary

Respondents were asked:

Q9) And now a question about tax. Is a person’s gross salary before or after tax?

Gross salary before or after tax

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q9

88%

9%

2%

89%

9%

2%

0% 20% 40% 60% 80% 100%

Correct - Before tax

After tax

Don't know

Ngai Tahu New Zealand

Nine out of ten (88%) Ngāi Tahu respondents correctly said that gross salary is before tax. This is

consistent with the national results.

Page 65: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 63

Secured loans

Respondents were asked:

Q17a) Do you know what the term ‘secured loan’ means?

81%78%

0%

20%

40%

60%

80%

100%

Have personal loan or mortgage

Ngai Tahu New Zealand

76%

70%

0%

20%

40%

60%

80%

100%

All respondents

Ngai Tahu New Zealand

Secured loan

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q17a

Yes - Know what ‘secured loan’ means

Yes - Know what ‘secured loan’ means

Base: Have personal loan or mortgage Ngai Tahu (n=190), New Zealand (n=314)Source: Q17a

Three quarters (76%) of Ngāi Tahu respondents said that they know what the term ‘secured loan’

means. This is significantly higher than the national average of 70%.

Ngāi Tahu respondents with a personal loan or mortgage are significantly more likely than those

without a personal loan or mortgage to know the meaning of ‘secured loan’ (81% of Ngāi Tahu

respondents with a personal loan or mortgage c.f. 70% of Ngāi Tahu respondents without a personal

loan or mortgage).

Page 66: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 64

If respondents said they knew what the term ‘secured loan’ means, they were asked a question to

determine the extent of their knowledge.

Q17b) If someone is not able to make the repayments on a secured loan, is the organisation

that lent them the money allowed to sell the assets that were used as security for the loan?

If unable to meet repayments on secured loan, whether can sell assets

Base: All respondents who say they know what ‘secured loan’ means Ngai Tahu (n=307), New Zealand (n=599)Source: Q17b

92%

8%

92%

4%

2%

0% 20% 40% 60% 80% 100%

Correct - Yes

No

Don't know

Ngai Tahu New Zealand

Of the Ngāi Tahu respondents who said they knew what the term ‘secured loan’ means, 92%

correctly agreed that the organisation lending the money is able to sell the assets that were used as

security for the loan if the repayments are unable to be made. This is consistent with the national

results.

However, a significantly larger portion of respondents disagreed with this (8% of Ngāi Tahu c.f. 4%

of New Zealanders) and this is down from a smaller proportion who said they were unsure.

Page 67: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 65

Equity and leverage

Respondents were asked:

Q21a) Do you know what the term ‘equity’ means?

Those who said they knew the meaning of ‘equity’ were then asked a question to determine if they

did in fact know the meaning.

Q21b) Mike owns a house worth $275,000 and has a home loan of $125,000. What is his

equity in the house?

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q21a

Base: Respondents who stated they knew what ‘equity’ means Ngai Tahu (n=281), New Zealand (n=577)

Source: Q21b

Equity

Know what ‘equity’ means

Mike owns a house worth $275,000 and has a home loan of $125,000. What is his equity in the house?

69%

28%

2%

66%

30%

4%

0% 20% 40% 60% 80%

Yes

No

Don't know

Ngai Tahu New Zealand

89%92%

0%

20%

40%

60%

80%

100%

Correct - $150,000

Ngai Tahu New Zealand

Seven in ten (69%) Ngāi Tahu respondents said that they knew what the term ‘equity’ means. Of

those who said that they knew the meaning, 89% correctly calculated the equity in the scenario

presented. This is consistent with the national results.

By drawing on responses to both questions, the next chart presents the level of correct knowledge of

the meaning of equity among the total sample.

Page 68: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 66

Base: VariesSource: Q21a, Q21b

Equity (combining both questions) – correct answer

61%

79%

52%

61%

80%

50%

0%

20%

40%

60%

80%

100%

All respondents Have mortgage on home Don't have mortgage on home

Ngai Tahu New Zealand

As a proportion of all Ngāi Tahu respondents, three in five (61%) understood the term ‘equity’, which

is consistent with the national results. While those with a mortgage are more likely than those

without a mortgage to understand the term, this is also consistent with the national results.

Page 69: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 67

Credit cards

Credit card payments

Respondents’ understanding of credit card payments was tested with the following question:

Q4) Please tell me which of the following statements are true and which are false?

a) If John pays off the full amount on his credit card each month he gets interest-free days

on purchases

b) If John only pays the minimum payment each month he still owes money after the

minimum payment.

66%

66%

83%

85%

15%

15%

7%

5%

19%

19%

8%

10%

1

1

1

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

True False Don't know Don't understand Missing information

Credit card

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q4

Pay off full amount on credit card, get interest-free days

If only pay minimum amount, still owes money after minimum payment

Correct = True

Correct = True

Two thirds (66%) of Ngāi Tahu respondents correctly identified that paying off the full amount on the

credit card each month would give John interest-free days on purchases, while four in five (83%)

respondents correctly identified that John would still owe money if he only pays the minimum

payment each month. Both results are consistent with the national results.

The next chart presents these results by credit card ownership.

Page 70: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 68

82%

75%

43%

48%

94%

94%

68%

68%

10%

13%

21%

19%

5

2

11%

10%

8%

12%

34%

32%

1

4

19%

21%

1

2

1

1

1

1

1

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

True False Don't know Don't understand Missing information

Credit card

Base: Varies by credit card ownershipSource: Q4

Pay off full amount on credit card, get interest-free days

If only pay minimum amount, still owes money after minimum payment

Have Credit Card

Do not have Credit Card

Have Credit Card

Do not have Credit Card

Correct = True

Correct = True

As expected, credit card holders have higher levels of knowledge relating to credit card payments

than those who do not own a credit card. However, respondents from this survey who had a credit

card were more likely than those from the national survey to correctly identify that paying off the full

amount on the credit card each month would give John interest-free days on purchases (82% of Ngāi

Tahu c.f. 75% of New Zealanders).

Although the proportion for respondents from this survey who have a credit card are just as likely as

those from the national survey to correctly identify that John would still owe money if he only pays

the minimum payment each month, Ngāi Tahu respondents are also more likely to give the incorrect

answer (5% of Ngāi Tahu c.f. 2% of New Zealanders).

Page 71: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 69

Banking

Bank statements

Respondents were asked a series of questions relating to bank statements. Results to the last

question (Q2d) were reported earlier in the section entitled Numeracy. The results to the first three

questions are presented in this section of the report.

Now I’m going to show you an example of a bank statement and I will ask you some

questions about it. Please look closely at this bank statement and can you tell me:

Q2a) How much did they have at the end of the month?

Q2b) Have they saved money this month?

Q2c) How much have they saved this month?

Page 72: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 70

Bank statement – amount at end of month, any saved, amount saved

Correct: How much had at end of month

Correct: Have saved money

Correct: How much saved

90%

81%

74%

92%

82%80%

0%

20%

40%

60%

80%

100%

Base: all respondents asked Base: all respondents asked Base: all respondents aware have saved

Ngai Tahu New Zealand

Source: Q2a, Q2b, Q2c

Ngai Tahu (n=400), NZ (n=850) Ngai Tahu (n=400), NZ (n=850) Ngai Tahu (n=328), NZ (n=692)

Nine in ten (90%) Ngāi Tahu respondents correctly identified from the bank statement how much the

statement owner had at the end of the month, and eight in ten (81%) correctly identified that the

statement owner had saved money. These results are consistent with the national results.

Of the respondents who said the statement owner had saved money, a quarter (74%) correctly

stated how much had been saved. When compared to the national results (80%), this is significantly

lower.

Page 73: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 71

Withdrawing cash

Respondents’ awareness of fees that apply to basic banking services was tested with the following

question:

Q3) John needs to take out $50 cash for the weekend and also pay for his groceries. Which

of the following ways would John pay the least in fees and costs?

Pay least in fees & costs to take out $50 cash & pay for groceries

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q3

69%

27%

1% 2%

60%

34%

2% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Correct - EFTPOS at supermarket Cash from bank teller Cheque for groceries, ATM for cash Don't know

Ngai Tahu New Zealand

Just over two thirds (69%) of Ngāi Tahu respondents correctly identified that paying by EFTPOS at

the supermarket, and taking out cash at the same time, would be the best way for John to pay the

least in fees and costs. This is significantly higher than the national average where only 60% gave

the correct answer.

Conversely, the proportion of Ngāi Tahu respondents who incorrectly thought that getting enough

cash from the bank teller to pay for the groceries and for the weekend would be the best way for

John to pay the least in fees is significantly lower than the national average (27% of Ngāi Tahu c.f.

34% of New Zealanders).

Page 74: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 72

Advantages of Internet banking

To establish the extent to which respondents recognise the financial advantages of Internet banking,

respondents were asked:

Q5) Amanda usually does her banking over the counter at her local branch. What financial

advantages would there be if Amanda used Internet Banking instead of going into her local

branch? Any other financial advantages?

52%

35%

35%

35%

32%

28%

26%

11%

55%

43%

39%

27%

26%

16%

20%

12%

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Financial advantages of using Internet banking instead of over the counter at local branch

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850). NB: Responses 10% or less not depicted. Source: Q5

(Main reasons given)

Correct - Cheaper/cost/no fees/fees lower

Quicker

Convenience

Access at home/work

24 hour access

Can do it in own time

Can see transaction details/history

Don’t know

The key financial advantage associated with Internet banking relates to cost savings (mentioned by

52% of Ngāi Tahu respondents). This is consistent with the national survey, however, Ngāi Tahu are

more likely than the national average to mention the following advantages:

� access at home/work (35% of Ngāi Tahu c.f. 27% of New Zealanders)

� 24 hour access (32% of Ngāi Tahu c.f. 26% of New Zealanders)

� can see transaction details/history (28% of Ngāi Tahu c.f. 16% of New Zealanders)

� can do it in own time (26% of Ngāi Tahu c.f. 20% of New Zealanders).

On the other hand, Ngāi Tahu are less likely than the national average to mention that Internet

banking is quicker (35% of Ngāi Tahu c.f. 43% of New Zealanders).

Page 75: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 73

The results to this question are presented below for users of Internet banking.

65%

48%

43%

42%

39%

38%

32%

1%

72%

51%

35%

56%

22%

33%

23%

2%

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Base: Internet banking users Ngai Tahu (n=220), New Zealand (n=366)Source: Q5

(Main reasons given)

Correct - Cheaper/cost/no fees/fees lower

Quicker

Convenience

Access at home/work

24 hour access

Can do it in own time

Can see transaction details/history

Don’t know

Financial advantages of using Internet banking instead of over the counter at local branch – Internet bankers

Among users of Internet banking, Ngāi Tahu are more likely than the national average to recognise

the advantages of seeing transaction details and doing banking in their own time and less likely to

recognise that Internet banking is quicker.

Page 76: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 74

Advantages of paying bills on or before the due date

Respondents were asked:

Q6a) If Elizabeth has a telephone bill due on the 20th of the month, are there advantages in

paying the bill on or just before the day it is due?

Q6b) What advantages are there? Anything else?

The results to both these questions are presented in the following chart.

77%

20%

2%

76%

21%

3%

0% 20% 40% 60% 80% 100%

Correct - Advantage

No Advantage

Don't know

Ngai Tahu New Zealand

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q6a

54%

49%

29%

26%

14%

47%

57%

14%

20%

16%

0% 10% 20% 30% 40% 50% 60%

Qualify for discount (Correct)

Avoid overdue fee (Correct)

Peace of mind that paid

Get good credit history

Maximise interest earned (Correct)

Ngai Tahu New Zealand

Advantages in paying bill on or just before due day

(Main reasons given)

Base: Respondents who considered there is advantage Ngai Tahu (n=313), New Zealand (n=637)

Source: Q6b

Around three quarters (77%) of Ngāi Tahu respondents said there are advantages in paying the bill

on or just before the due date, which is consistent with the national results.

When compared to the national average, a significantly higher proportion of Ngāi Tahu viewed

qualifying for a discount as a benefit to paying the bill on or just before the due date (54% of Ngāi

Tahu c.f. 47% of New Zealanders), and a significantly lower proportion of Ngāi Tahu viewed avoiding

overdue fees as a benefit (49% of Ngāi Tahu c.f. 57% of New Zealanders).

Significantly higher proportions of Ngāi Tahu also viewed peace of mind and good credit history as

benefits.

Page 77: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 75

Budgeting

Description of a budget

Respondents were asked:

Q10) Which of the following is the best description of a budget?

Best description of a budget

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q10

79%

15%

2%

4%

1%

81%

10%

5%

4%

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Correct – plan for what you earn and what you spend

Knowing where all your money goes

Accounting spreadsheet

Spending as little as you can

Don’t understand

Four in five (79%) Ngāi Tahu correctly identified the best description of a budget as ‘a plan for what

you earn and what you spend’. This is consistent with the national results.

Those that have a budget are more likely than those who do not have a budget to correctly identify

the best description (86% of those with a budget c.f. 69% of those without a budget).

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, there is a significant knowledge gap between the Lowest knowledge

group and the Advanced knowledge group in regards to understanding what a budget is (31% of the

Lowest knowledge group c.f. 93% of the Advanced knowledge group). Instead, those is the Lowest

knowledge group are significantly more likely than those in the Advanced knowledge group to think

that a budget is knowing where all your money goes (41% of the Lowest knowledge group c.f. 6% of

the Advanced knowledge group) or spending as little as you can (24% of the Lowest knowledge

group c.f. 0% of the Advanced knowledge group).

Page 78: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 76

Importance of a budget

Without prompting, all respondents were asked:

Q11) Why is it important to have a budget? Anything else?

Results to this question are presented in the following graph. The percentages in brackets refer to

the national New Zealand survey results.

Respondents could give more than one answer. Categories that are similar to each other have been

grouped together and presented as a ‘nett score’ – this figure gives the percentage of respondents

that gave at least one of the more detailed suggestions (which are listed below the nett score).

92%

79%

26%

24%

22%

56%

42%

29%

48%

40%

15%

0% 20% 40% 60% 80% 100%

Why is it important to have a budget

(Main reasons given) – all correct

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850). NB: Figures in brackets are the NZ results. Responses less than 2% not depicted.Source: Q11

To control spending/pay bills on time

Plan how much can spend & save

To keep track of where money is going

To have savings

Plan what spend money on

Achieve financial goals

Know where income is coming from

Make sure money will last

NETT PLANNING

NETT CONTROL

NETT TRACKING

(92%)

(84%)

(25%)

(15%)

(16%)

(53%)

(43%)

(23%)

(43%)

(38%)

(12%)

Nine in ten (92%) Ngāi Tahu respondents mentioned that it is important to have a budget for reasons

relating to ‘control’, over half (56%) mentioned a reason relating to planning, and just under half

(48%) mentioned a reason relating to tracking. These are all consistent with the national results.

However, when we look at the specific reasons respondents provided, some differences with the

national results are evident. When compared to the national survey, Ngāi Tahu are more likely to

mention the following reasons for why it is important to have a budget:

� to achieve financial goals (24% of Ngāi Tahu c.f. 15% of New Zealanders)

� to make sure money will last (22% of Ngāi Tahu c.f. 16% of New Zealanders)

� to plan what to spend money on (29% of Ngāi Tahu c.f. 23% of New Zealanders).

Conversely, Ngāi Tahu are less likely to mention that controlling spending/paying bills on time is a

reason for having a budget (79% of Ngāi Tahu c.f. 84% of New Zealanders).

Page 79: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 77

Who benefits from a budget

Respondents were asked:

Q12) Which of the following best describes who can benefit from having a budget?

Who benefits from having a budget

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q12

80%

14%

5%1%

74%

20%

5%1%

0%

20%

40%

60%

80%

100%

Correct -Everyone

People who have difficulties

managing money

People without much money

People with a lot of money

Ngai Tahu New Zealand

Four in five (80%) Ngāi Tahu respondents felt that everyone can benefit from having a budget. This

is significantly higher than the national average where only 74% said everyone can benefit.

Conversely, when compared to the national average, a significantly smaller proportion of respondents

said that only people who have difficulties managing money can benefit from having a budget (14%

of Ngāi Tahu c.f. 20% of New Zealanders).

Those that have a budget are significantly more likely than those who don’t have a budget to say that

everyone can benefit (89% of those with a budged c.f. 67% of those without a budget).

Page 80: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 78

Proportion who have a budget

Respondents were asked:

Q13) Do you have a budget?

Proportion who have a budget

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q13

60%64%

0%

20%

40%

60%

80%

100%

Ngai Tahu New Zealand

Three in five (60%) Ngāi Tahu respondents said they have a budget and this is consistent with the

national average.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the Advanced knowledge group are significantly more likely

than those in the Lowest knowledge group to have a budget (71% of the Advanced knowledge group

c.f. 50% of the Lowest knowledge group).

Similarly, those in the High knowledge group are significantly more likely than those in the Low

knowledge group to have a budget (67% of the High knowledge group c.f. 50% of the Low

knowledge group).

Page 81: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 79

Goal setting, long term goals, financial planning

Financial goals

Respondents were asked the following questions about financial goals:

Q14a) Do you have financial goals?

Q14b) Are these goals written down?

Financial goals

79%

21%

75%

25%

0% 20% 40% 60% 80% 100%

Have financial goals

Do not have financial goals

Ngai Tahu New Zealand

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q14a

Whether have financial goals

Whether goals written down

Base: Respondents with financial goals Ngai Tahu (n=318), New Zealand (n=637)Source: Q14b

69%

31%

70%

30%

0% 20% 40% 60% 80%

Not written down

Written down

Ngai Tahu New Zealand

Four in five (79%) Ngāi Tahu respondents said that they have financial goals. Of the respondents

who have financial goals, only a third (31%) have their goals written down. Both of these results are

consistent with the national results.

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those with financial goals tend to have a higher level of financial

knowledge than those without financial goals:

� 45% of respondents with financial goals are in the High knowledge group compared to only 18% of those without financial goals

� 56% of respondents without financial goals are in the Low knowledge group compared to only 22% of those with financial goals.

Page 82: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 80

Financial plans

Respondents were asked:

Q15) A financial plan is a written approach of the steps you plan to take to achieve your

financial goals. Do you have a financial plan that is written down?

Financial plans

76%

24%

79%

21%

0% 20% 40% 60% 80% 100%

Do not have written financial plan

Have written financial plan

Ngai Tahu New Zealand

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q15

Whether have financial plan

A quarter (24%) of Ngāi Tahu respondents have a financial plan that is written down, which is

consistent with the national results.

Page 83: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 81

Respondents’ understanding of financial plans was tested with the following question:

Q16) I am going to read out some statements about financial plans and would like you to tell

me whether you think the statement is true, false, or whether you don’t know.

10%

9%

96%

96%

8%

4%

85%

88%

2

2

85%

93%

4%

3%

2

1

6%

2

1

0% 20% 40% 60% 80% 100%

True False Don't know Don't understand

Financial plans - statements

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q16

Ngai Tahu

New Zealand

Financial plans are set up once and you use that plan throughout your life

Financial planning is about investment only

Financial plans should take into account possible changes in your life

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Correct = False

Correct = True

Correct = False

The majority (85%) of Ngāi Tahu respondents correctly identified the following statement as false:

‘Financial plans are set up once and you use that same plan throughout your life’, while almost all

(96%) respondents correctly identified the following statement as true: ‘Financial plans should take

into account possible changes in your life’. These are consistent with the national results.

Most (85%) Ngāi Tahu respondents also correctly identified the following statement as false:

‘Financial planning is about investment only’, which is significantly lower than the national average

where 93% correctly identified the statement as false.

Page 84: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 82

Debt management

Loan guarantees

Respondents’ understanding of the responsibility of the guarantor was tested with the following

question:

Q18) If Bob personally guarantees a loan for John, and John does not make the repayments he

is supposed to, which one of the following is Bob required to do?

a) Bob has to represent John in court

b) Bob has to take over the debt and make the repayments

c) Bob has to help to get the money from John.

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q18

82%

12%

4%

1%

83%

11%

4%

2%

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

If Bob personally guarantees loan for John & John does not make repayments …

Correct – Bob has to take over the debt and

make repayments

Bob has to get the money from John

Bob has to represent John in court

Don’t know

Four in five (82%) Ngāi Tahu respondents correctly identified that as the guarantor Bob would have

to take over the debt and make the repayments himself if John does not follow through with

repayments. This is consistent with the national results.

Page 85: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 83

Debt management

Fastest way to pay off debt

Respondents’ understanding of the fastest way to pay off debt was tested with the following

question:

Q19) If Pete has $2,000 owing on his credit card paying 19.5% interest, and another personal

loan of $500 at 11.5% interest, which would allow him to get rid of his debt faster?

a) Repay the minimum amount on the credit card and repay the personal loan faster

b) Pay off the credit card debt faster and pay only the minimum amount on the personal

loan until the credit card debt is cleared

c) Invest any available money in a term deposit paying 7%

d) Transfer or consolidate the credit card debt into the personal loan and pay the lower

interest rate.

57%

28%

4%

2%

9%

1%

49%

35%

7%

2%

7%

1%

0% 10% 20% 30% 40% 50% 60%

Ngai Tahu

New Zealand

Correct - Transfer/consolidate credit card debt into personal loan and pay

lower interest rate

$2,000 owing on credit card paying 19.5% interest, personal loan of $500 at 11.5%, how get rid of debt faster? (Overall)

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q19

Pay off credit card debt faster and only minimum on personal loan

Repay minimum on credit card and repay personal loan faster

Invest available money in 7% term deposit

Don’t know

Don’t understand

The proportion of Ngāi Tahu respondents who correctly identified that Pete should consolidate his

credit card debt into the personal loan thereby paying the lower interest rate is significantly higher

than the national average (57% of Ngāi Tahu c.f. 49% of New Zealanders). Conversely, the

proportions who incorrectly said that Pete should pay off his credit card faster and pay only the

minimum amount on his personal loan or that he should repay the minimum amount on the credit

card and repay the personal loan faster are significantly lower than the national average (28% of

Ngāi Tahu c.f. 35% of New Zealanders and 4% of Ngāi Tahu c.f. 7% of New Zealanders

respectively).

Page 86: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 84

As the next chart illustrates, respondents who have a personal loan or a mortgage are more likely to

give the correct answer, compared to those who do not have a personal loan or a mortgage.

However, there are no significant differences between these proportions and the national results.

$2,000 owing on credit card paying 19.5% interest, personal loan of

$500 at 11.5%, how get rid of debt faster?

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q19

Correct – Consolidate the Debt

57%

49%

0%

20%

40%

60%

80%

100%

All respondents

Ngai Tahu New Zealand

Correct – Consolidate the Debt

65%

59%

0%

20%

40%

60%

80%

100%

Have personal loan or home mortgage

Ngai Tahu New Zealand

Base: Have personal loan or home mortgage Ngai Tahu (n=190), New Zealand (n=314)Source: Q19

Page 87: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 85

Paying off debt first

Respondents’ understanding of the importance of paying off debt first was tested with the next

question:

Q30) Robyn has inherited $7,000. She has a home loan of $100,000 and has an emergency

fund of $5,000. Her friend says she should invest the $7,000 in a term deposit. Would you

recommend that she pays more off her home loan, or invests the $7,000 inheritance in a

term deposit?

Inherited $7,000. Home loan of $100,000. Emergency fund of $5,000. Friend recommends investing $7,000 in term deposit

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q30

70%

25%

4%

1%

68%

25%

5%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Ngai Tahu

New Zealand

Correct - Should pay more off home loan

Should invest in term deposit

Don’t know

Don’t understand

Seven in ten (70%) Ngāi Tahu respondents correctly understood that Robyn should pay more off her

home loan, which is consistent with the national results and does not vary significantly between those

with a home mortgage and those without.

Page 88: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 86

Home loans/mortgages

Minimising interest

To measure respondents’ understanding of how to minimise interest on a mortgage, they were

asked:

Q20) A home loan is what people usually call a mortgage, it is the money that is borrowed to

pay for a house. I am going to read out some statements about minimising the amount of

interest you pay on a home loan and would like you to tell me whether you think the

statement is true, false, or whether you don’t know.

First, if you wanted to minimise the amount of interest you pay on your home loan you could

(…). Is that true or false, or do you not know?

To minimise the interest…

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q20

51%

53%

91%

87%

4%

5%

32%

30%

3

6%

83%

83%

15%

16%

5%

6%

11%

11%

1

1

1

1

1

1

1

0% 20% 40% 60% 80% 100%

True False Don't know Don't understand Missing information

Ngai Tahu

New Zealand

Pay half your monthly payment every fortnight

Put some payments on credit card and pay it off every six months

Increase amount of regular payments

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Correct = True

Correct = True

Correct = False

Page 89: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 87

‘Pay half your monthly payment every fortnight’

Just over half (51%) of Ngāi Tahu respondents correctly chose ‘true’ for the first statement, that to

minimise interest on your home loan you should pay half your monthly payment every fortnight. This

is consistent with the national results.

‘Increase the amount of your regular payments’

Nine in ten (91%) Ngāi Tahu respondents correctly said that increasing the amount of regular

payments is true, which is significantly higher than the national average (87%). Conversely,

significantly fewer respondents said it was false (3% of Ngāi Tahu c.f. 6% of New Zealanders).

‘Put some of your payments on your credit card and pay it off every six months’

Around four in five (83%) Ngāi Tahu respondents correctly chose ‘false’ for the statement, that to

minimise interest on your home loan you should put some payments on credit card and pay it off

every six months. This is consistent with the national results.

Page 90: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 88

The next chart details levels of understanding of how to minimise interest on a mortgage among

those who have a mortgage and those who don’t.

To minimise the interest…

Base: Varies by whether have mortgage‘Source: Q20

58%

68%

49%

47%

95%

94%

89%

85%

3

2

4%

6%

36%

25%

30%

32%

4

3

3

7%

90%

93%

80%

80%

6%

7%

20%

20%

3

7%

8%

6%

5%

14%

14%

1

1

1

1

1

1

1

1

0% 20% 40% 60% 80% 100%

True False Don't know Don't understand Missing information

Have Home Mortgage

Pay half your monthly payment every fortnight

Increase amount of regular payments

Put some payments on credit card and pay it off every 6 months

Do not have Home Mortgage

Have Home Mortgage

Do not have Home Mortgage

Have Home Mortgage

Do not have Home Mortgage

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Correct = True

Correct = True

Correct = False

While respondents with a mortgage do have greater knowledge than those without a mortgage of

how to minimise interest, the gap between these two groups is slightly smaller for Ngāi Tahu than for

New Zealand (for all three statements).

Correct understanding of how to minimise interest, regardless of whether or not respondents have a

home mortgage, is consistent with results from the national survey. However, the average Ngāi Tahu

respondent with a mortgage is more likely than the average New Zealander with a mortgage to

incorrectly think that interest will not be minimised if they pay half their monthly payments every

fortnight (36% of Ngāi Tahu with a mortgage c.f. 25% of New Zealanders with a mortgage).

On the other hand, the average Ngāi Tahu respondent without a mortgage is less likely than the

average New Zealander without a mortgage to incorrectly think that interest will not be minimised if

regular payments are increased (3% of Ngāi Tahu without a mortgage c.f. 7% of New Zealanders

without a mortgage).

Page 91: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 89

Equity and leverage

To test respondents’ understanding of equity and leverage, respondents were asked:

Q22) Mike owns a house worth $275,000 and has a home loan of $125,000. If Mike wants to

buy an investment property, but doesn’t have the money for the deposit, which is the most

likely way for him to get the finance for the property at the lowest interest rate?

a) Take out an unsecured loan for a deposit

b) Borrow from a financier who will lend him 100% of the value of the house, using the

investment property as security

c) Borrow against the value in his existing property.

77%

9%

5%

9%

1%

77%

13%

2%

7%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Ngai Tahu

New Zealand

Correct - Borrow against value in existing property

Borrow 100% using investment property as security

Take out unsecured loan for deposit

Don’t know

Don’t understand

To buy an investment property without deposit, most likely way to get finance at lowest interest rate

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q22

Correct identification among Ngāi Tahu respondents (77%) that Mike should borrow against the value

in his existing property is consistent with the national results.

When compared to the national average, significantly fewer Ngāi Tahu respondents said that Mike

should borrow 100% using investment property as security (9% of Ngāi Tahu c.f. 13% of New

Zealanders), while significantly more Ngāi Tahu respondents said that Mike should take out an

unsecured loan for a deposit (5% of Ngāi Tahu c.f. 2% of New Zealanders).

Page 92: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 90

Fixed interest rates

To test respondents’ understanding of the circumstances in which a fixed interest rate is preferable,

the following question was asked:

Q23) In which of the following situations would it be better to have a two year fixed interest

rate home loan rather than a variable or floating rate home loan?

a) When your bank comes out with a better fixed interest rate than the other banks

b) When interest rates are expected to increase over the next 2 years

c) When interest rates are expected to fall over the next 2 years

d) When the value of your house is going to increase over the next 2 years

Better to have 2 year fixed interest rate home loan rather than variable or floating rate

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q23

70%

10%

7%

5%

7%

1%

63%

11%

8%

6%

10%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Ngai Tahu

New Zealand

Correct – when interest rates are expected to increase over the next 2

years

When your bank has a better fixed rate than other banks

When the value of your house is going to increase over the next 2 years

When interest rates are expected to fall over the next 2 years

Don’t know

Don’t understand

Seven in ten (70%) Ngāi Tahu respondents correctly said that it would be better to have a two year

fixed rate when interest rates are expected to increase over the next two years. This is significantly

higher than the national average (63%).

The next chart shows a comparison between the proportion who gave the correct answer among

those who have a mortgage on their own home and those who don’t.

Page 93: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 91

Base: Varies by whether or not have mortgage on own homeSource: Q23

Better to have 2 year fixed interest rate home loan rather than variable or floating rate – correct answer

82%

64%

79%

62%

0%

20%

40%

60%

80%

100%

Have mortgage on own home Don't have mortgage on own home

Ngai Tahu New Zealand

Of the Ngāi Tahu respondents with a mortgage on their own home, 82% had a correct understanding

that it would be better to have a two year fixed rate when interest rates are expected to increase

over the next two years; compared to those who don’t have a mortgage where 64% had correct

understanding. These results are consistent with the national results.

Page 94: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 92

Fixed, floating and variable home loans

Respondents’ understanding of fixed, floating and variable interest rates was tested with the following

question:

Q24) I am now going to read out some statements about different types of home loans and

would like you to tell me whether you think the statement is true, false, or whether you don’t

know.

With a fixed rate home loan, the interest rate remains the same for the term of the loan

With a variable or floating rate home loan, you can repay in part or in full at any time

without penalty

With a revolving credit facility loan, you are charged a penalty for making an early

repayment.

The results are presented in the next two charts. The first chart provides results based on the total

sample. The second chart analyses the results by those with and without a mortgage.

80%

80%

54%

46%

26%

21%

14%

10%

21%

24%

28%

34%

5

9%

24%

29%

44%

44%

1

1

1

1

1

0% 20% 40% 60% 80% 100%

True False Don't know Don't understand

Ngai Tahu

New Zealand

Statements about home loan interest rates

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q24

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Fixed rate home loan, the interest rate remains the same for term of the loan

Variable or floating rate home loan, can repay part or in full without penalty

Revolving credit facility loan, charged penalty for early repayment

Correct = True

Correct = True

Correct = False

Page 95: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 93

87%

87%

78%

77%

68%

65%

48%

40%

31%

16%

26%

21%

13%

9%

13%

11%

20%

19%

22%

26%

58%

72%

26%

31%

3

8%

12%

12%

16%

30%

33%

11%

11%

47%

47%

1

1

1

1

1

0% 20% 40% 60% 80% 100%

True False Don't know Don't understand

Have Home Mortgage

Fixed rate home loan, the interest rate remains the same for term of the loan

Variable or floating rate home loan, can repay part or in full without penalty

Revolving credit facility loan, charged penalty for early repayment

Do not have Home Mortgage

Have Home Mortgage

Do not have Home Mortgage

Have Revolving Credit

Do not have Revolving Credit

Base: Varies by product ownershipSource Q24

Statements about home loan interest rates

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Correct = True

Correct = True

Correct = False

‘With a fixed rate home loan the interest rate remains the same for the term of the loan.’

As with the national results, 80% of Ngāi Tahu respondents correctly said that this statement is true.

However, significantly more Ngāi Tahu respondents said this statement is false (14% of Ngāi Tahu

c.f. 10% of New Zealanders) and this results from significantly fewer Ngāi Tahu respondents who

were unsure (5% of Ngāi Tahu c.f. 9% of New Zealanders).

When comparisons are made between the average Ngāi Tahu respondent with a mortgage and those

without a mortgage, those with a mortgage are more likely to answer this question correctly (87% of

Ngāi Tahu with a mortgage c.f. 78% of Ngāi Tahu without a mortgage).

‘With a variable or floating rate home loan you can repay in part or in full at any time without

penalty.’

Just over half (54%) of Ngāi Tahu respondents correctly recognised that you can repay part of a variable or

floating rate home loan without penalty, which is significantly higher than the national average (46%).

As with the previous statements, when comparisons are made between the average Ngāi Tahu respondent

with a mortgage and those without a mortgage, those with a mortgage are more likely to answer this

question correctly (68% of Ngāi Tahu with a mortgage c.f. 48% of Ngāi Tahu without a mortgage).

The average Ngāi Tahu respondent without a mortgage is more likely than the average New Zealander

without a mortgage to answer this question correctly (48% of Ngāi Tahu without a mortgage c.f. 40% of

New Zealanders without a mortgage).

Page 96: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 94

‘With a revolving credit facility loan you are charged a penalty for making an early repayment.’

Only 28% of Ngāi Tahu respondents correctly identified that this statement was false, which is significantly

lower than the national average (34%).

As expected, the average Ngāi Tahu respondent with a revolving credit loan is more likely than those

without one, to answer this question correctly (58% of Ngāi Tahu with revolving credit c.f. 26% of Ngāi

Tahu without revolving credit).

Page 97: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 95

Managing risk

Life insurance

Respondents were asked a series of questions relating to insurance and managing financial risk.

Q25) If each of the following people had the same amount of yearly income, who would need

the greatest amount of life insurance?

a) A young single woman without children

b) A young single woman with two children

c) A young married woman without children

Who needs the greatest amount of life insurance

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q25

87%

7%

2%

4%

1%

93%

4%

2%

1%

0% 20% 40% 60% 80% 100%

Ngai Tahu New Zealand

Young married woman with no children

Young single woman, no children

Correct – young single woman, two children

Don’t understand

Don’t know

While a large majority (87%) of Ngāi Tahu respondents correctly identified that a young single

woman with two children needed the greatest amount of life insurance, this is significantly lower than

the national average (93%).

Page 98: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 96

Entitlement to share of house when two people separate

Respondents were asked:

Q26) David moved into Jane’s house four years ago. They have now decided to separate. Is

David entitled to a share of Jane’s house?

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q26

84%

10%

6%

78%

16%

5%

0% 20% 40% 60% 80% 100%

Ngai Tahu New Zealand

No

Don’t know

Correct – Yes

David moved into Jane’s house 4 years ago. Is David entitled to a share of Jane’s house now they are separating?

Most (84%) Ngāi Tahu respondents correctly answered that David was entitled to a share of Jane’s

house. When compared to the national results (78%), this is significantly higher.

Page 99: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 97

Saving

Compound interest on savings account

Respondents’ understanding of compound interest was tested with the following question:

Q28a) Ben and Sarah are the same age and both put their money into a savings account

earning interest. Sarah started saving when she was 20 and saved $2,500 each year. Ben

started saving when he was 40 and saved $5,000 each year. They are now both 60. Do Ben

and Sarah have the same amount of money saved, or does one have more than the other?

If one has more:

Q28b) Who has more money?

Q28c) Why do they have more money?

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q28a, Q28b

28%

5%

61%

4%2%

37%

6%

50%

5%

1%

0%

10%

20%

30%

40%

50%

60%

70%

Ngai Tahu

New Zealand

Sarah saved from 20 years of age $2,500 each year. Ben saved from 40 years of age $5,000 each year. Now both 60.

Correct -Sarah has more than

Ben

Ben has more than Sarah

Same amount

Don’t know Don’t understand question

Three in ten (28%) Ngāi Tahu respondents correctly identified that Sarah would have saved more

money than Ben which is significantly lower than the national average (37%).

Conversely, significantly more Ngāi Tahu respondents incorrectly thought Ben and Sarah would have

saved the same amount (61% of Ngāi Tahu c.f. 50% of New Zealanders).

Reason why Sarah would have more

Of those who correctly identified that Sarah would have more, 93% of Ngāi Tahu respondents gave

the correct reason for this (because her money has grown in her savings account for a longer time

earning compound interest).

Page 100: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 98

Full knowledge of compound interest

Of all Ngāi Tahu respondents, 26% correctly identified that Sarah would have saved more and that it

was because her money had been in a savings account for longer (earning compound interest). This

is significantly lower than the national average (35%).

Page 101: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 99

Compound interest on term deposit

To further test respondents’ understanding of compound interest, the following question was asked:

Q31) Which of the following term deposits would pay the most interest in total, or would they

pay the same amount of interest?

a) 1 year term deposit at 7% interest per annum paid at maturity

b) 1 year term deposit at 7% interest per annum paid quarterly back into the term

deposit

c) They would pay the same amount of interest

Term deposit paying most interest in total

Base: See column headingsSource: Q31, Q95

Ngai Tahu New Zealand

Total (n=400)

%

Have term deposit

(n=88)

%

Don’t have term deposit

(n=296)

%

Total (n=850)

%

Have term deposit

(n=241)

%

Don’t have term deposit

(n=605)

%

Correct – 1 year, 7% interest paid back into term deposit

43 59 39 58 70 53

Pay the same amount 32 25 35 20 16 21

1 year, 7% interest paid at maturity

10 8 10 7 5 8

Don’t know 13 8 14 13 8 15

Don’t understand 2 - 2 2 1 2

Four in ten (43%) Ngāi Tahu respondents demonstrated knowledge of compound interest when they

correctly chose the option of ‘a one year term deposit at 7% interest per annum paid quarterly back

into the term deposit’. This is significantly lower than the national average (58%). This is particularly

low among those that do not have a term deposit.

When compared to the national average, significantly more respondents incorrectly thought that the

term deposits would pay the same amount of interest (32% of Ngāi Tahu c.f. 20% of New

Zealanders). This is particularly high among those who do not have a term deposit.

Page 102: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 100

Inflation

Respondents’ understanding of inflation was tested with the following question:

Q29a) If John currently has an income of $30,000, how much income will he need in five years’

time to be able to live at the same standard?

a) $30,000

b) Less than $30,000

c) More than $30,000

Q29b) Why does he need more than $30,000?

87%

8%

1%

2%

1%

89%

3%

3%

5%

0% 20% 40% 60% 80% 100%

Ngai Tahu New Zealand

Income of $30,000. How much income needed in 5 years’ time to be able to live at the same standard?

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q29a

$30,000

Don’t know

Correct - More than $30,000

Less than $30,000

Why more than $30,000?

Ngai Tahu

New Zealand

Inflation/ increased cost/ price 93% 94%

Value of money changes 12% 14%

Other 5% 4%

Don’t know 1% 2%

Base: Respondents who stated more than $30,000 is required from Ngai Tahu (n=350), New Zealand (n=751)

Source: Q29b

Don’t understand

Most (87%) Ngāi Tahu respondents correctly identified that John would need more than $30,000 in

five years’ time to be able to live at the same standard, which is consistent with the national results.

Of the Ngāi Tahu respondents who correctly identified that John would need more, 93% attributed

the reason to inflation and 12% commented that the value of money changes over time.

Page 103: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 101

Interest accrual

The following question tested knowledge of interest accrual:

Q32) If Nicky had $100 in a savings account and the interest rate was 2% per year, after 5

years how much would Nicky have in her account if she left the money to grow? Would it be

more than $102, exactly $102 or less than $102?

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q32

85%

6%

5%

3%

86%

6%

4%

4%

0% 20% 40% 60% 80% 100%

Ngai Tahu New Zealand

$102

Don’t know

Correct - More than $102

$100 in savings account, 2% interest per year. After 5 years how much in account if left money to grow?

Less than $102

The majority (85%) of Ngāi Tahu respondents correctly understood the concept of interest accrual.

This is consistent with the national results.

Page 104: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 102

Effects of inflation on savings

Respondents were asked:

Q33) If the interest rate on Anne’s savings account was 1% per year and inflation was 2% per

year, after 1 year, would she be able to buy more than, exactly the same as, or less than

today with the money in this account?

76%

7%

11%

1%

6%

81%

7%

7%

1%

5%

0% 20% 40% 60% 80% 100%

Ngai Tahu New Zealand

Interest rate 1%, inflation 2%. After 1 year, buy more than, less than or exactly the same as today?

Base: All respondents Ngai Tahu (n=400) New Zealand (n=850)Source: Q33

Exactly the same

Don’t know

Correct - Less than

Don’t understand

More than

When compared to the national results, a significantly smaller proportion of Ngāi Tahu respondents

demonstrated knowledge of the effects of inflation on savings by correctly identifying that Anne

would be able to buy less than today with the money in her account (76% of Ngāi Tahu c.f. 81% of

New Zealanders). Conversely, a significantly larger proportion of Ngāi Tahu respondents incorrectly

stated that Anne would be able to buy more than today (11% of Ngāi Tahu c.f. 7% of New

Zealanders).

Page 105: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 103

Retirement planning

When reading this section on retirement planning it is important to take into account that the national

New Zealand survey had a relatively higher proportion of younger respondents when compared to the

Ngāi Tahu survey. The table below profiles the respondents from each survey by age group.

Age group Ngāi Tahu

(n=400)

New Zealand

(n=850)

18-34 years 18% 30%

35-44 years 23% 21%

45-54 years 24% 18%

55-64 years 17% 14%

65+ 16% 17%

Extent to which people think about financial planning for retirement

Respondents were asked:

Q34) To what extent have you thought about your financial planning for your retirement?

29%

27%

20%

29%

34%

27%

16%

17%

1%

0% 20% 40% 60% 80% 100%

A lot A fair amount A little Not at all Don't know

Extent thought about financial planning for retirement

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q34

Ngai Tahu

New Zealand

Half (49%) of the Ngāi Tahu respondents said that they think about their financial planning for

retirement either ‘a lot’ or ‘a fair amount’. This is significantly less than the national results (56%)

and is driven by a significantly smaller proportion of Ngāi Tahu respondents who said they think

about their financial planning for retirement ‘a fair amount’, and a significantly larger proportion of

respondents who said they think about retirement ‘a little’.

Page 106: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 104

Analysis by knowledge group (among Ngāi Tahu respondents)

Among Ngāi Tahu respondents, those in the High knowledge group are more likely to have thought

about financial planning for retirement either ‘a lot’ or ‘a fair amount’ (60% of the High knowledge

group said this compared to 47% of the Medium knowledge group and 37% of the Low knowledge

group).

Respondents in the Low knowledge group are more likely to say they don’t think about their financial

planning for retirement at all (31% of the Low knowledge group compared to 13% of the Medium

knowledge group and 6% of the High knowledge group).

Extent to which people think about financial planning for retirement by age

The next chart looks at the extent to which the average Ngāi Tahu respondent thinks about their

financial planning for retirement by age group.

8%13%

34%

49% 51%

11%

23% 27%

20%13%

48%

50%

29%25%

9%

32%

14%

9%

3%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18-34 years 35-44 years 45-54 years 55-64 years 65+

A lot Fair amount A little Not at all Dont know

Extent thought about financial planning for retirement by age

Base: Varies by age groupSource: Q34, Q75

As expected, the closer people get to the age of retirement, the more they tend to think about

financial planning for retirement.

Page 107: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 105

Factors to consider in saving for retirement

Without prompting, respondents were asked:

Q35) What are all the things a person needs to consider when they think about saving for

retirement? Anything else?

Respondents could give more than one answer. Categories that are similar to each other have been

grouped together and presented as a ‘nett score’ – this figure gives the percentage of respondents

that gave at least one of the more detailed suggestions (which are listed below the nett score).

83%

41%

40%

31%

21%

19%

19%

14%

55%

28%

24%

19%

13%

47%

22%

15%

12%

11%

33%

20%

18%

0% 20% 40% 60% 80% 100%

Things to consider when thinking about saving for retirement

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850), NB: Figures in brackets are NZ results. Responses less than 10% not depicted.Source: Q35

NETT RETIREMENT SPENDING/LIFESTYLE

NETT CURRENT FINANCIAL SITUATION

NETT RETIREMENT INCOME

NETT LENGTH OF RETIREMENT

(Main reasons given) – all correct

How much will need in retirement

Retirement spending/ lifestyle

Costs will have when retired

Whether own own home

Health/ Life insurance

Where want to live

Whether paying off debt in retirement

How much can afford to save

How long before they retire

Pay off mortgage

How much have already saved

How much will you earn from investments

How much money will have in retirement

Amount saved when they retire

How long will they live for

Life expectancy

(75%)

(49%)

(26%)

(20%)

(19%)

(10%)

(14%)

(10%)

(58%)

(28%)

(22%)

(21%)

(19%)

(44%)

(20%)

(18%)

(10%)

(24%)

(18%)

(10%)

(10%)How much Govt Super will receive

The most common factors (nett) taken into account when thinking about saving for retirement were

related to their spending/lifestyle (83%), their current financial situation (55%), and their retirement

income (47%).

When compared to the national average, the following factors (nett) were mentioned significantly

more frequently among Ngāi Tahu:

� spending/lifestyle (83% of Ngāi Tahu c.f. 75% of New Zealanders)

� length of retirement (33% of Ngāi Tahu c.f. 24% of New Zealanders).

When looking at the specific factors respondents take into account when thinking about saving for

retirement, the following were mentioned significantly more frequently among Ngāi Tahu than the

national average:

� retirement spending/lifestyle (41% of Ngāi Tahu c.f. 26% of New Zealanders)

� how much you needed in retirement (40% of Ngāi Tahu c.f. 49% of New Zealanders)

� costs you will have when retired (31% of Ngāi Tahu c.f. 20% of New Zealanders)

� health/life insurance (19% of Ngāi Tahu c.f. 10% of New Zealanders)

Page 108: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 106

� where you want to live (19% of Ngāi Tahu c.f. 14% of New Zealanders)

� whether paying off debt in retirement (14% of Ngāi Tahu c.f. 10% of New Zealanders)

� how much Government Superannuation you will receive (15% of Ngāi Tahu c.f. 10% of New Zealanders)

� life expectancy (20% of Ngāi Tahu c.f. 10% of New Zealanders).

The following were mentioned significantly less frequently among Ngāi Tahu than the national

average:

� how much you have already saved (13% of Ngāi Tahu c.f. 19% of New Zealanders)

� how much you will earn from investments (12% of Ngāi Tahu c.f. 20% of New Zealanders).

Page 109: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 107

New Zealand Superannuation

To test respondents’ understanding of the eligibility criteria for New Zealand Superannuation,

respondents were first asked:

And now thinking about New Zealand Superannuation, which is often called NZ Super, which

is the pension the government provides…

Q36) At what age are people entitled to NZ Super?

Age entitled to NZ Superannuation

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q36

85%

5%

5%

4%

84%

5%

2%

9%

0% 20% 40% 60% 80% 100%

Correct - 65 years

60 years

Other

Don't know

Ngai Tahu

New Zealand

Most (85%) Ngāi Tahu respondents knew that the age of entitlement for NZ Superannuation is 65.

This is consistent with the national results.

Page 110: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 108

The next chart displays correct knowledge by age group. As expected correct knowledge increases

as age increases.

71%

79%

94% 94% 93%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18-34 years 35-44 years 45-54 years 55-64 years 65+

60 65 Other Dont know

Age entitled to NZ Super

Base: Varies by age groupSource: Q36, Q75

Page 111: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 109

New Zealand Superannuation amount

Respondents were asked:

Q37) Do you know which of these amounts is closest to the after-tax amount of NZ Super for a

single person living alone?

Respondents were prompted with possible amounts. The amounts shown in the Ngāi Tahu and New

Zealand national survey are shown below.

Per year Per week

a) $7,800 $150

b) $15,500 $300

c) $20,200 $390

d) $23,400 $450

Amount closest to after-tax amount of NZ Super for single person living alone

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q37

27%

35%

8%

3%

26%

1%

Ngai Tahu New Zealand

22%

31%

8%

3%

36%

$7,800

$15,500(Correct)

$20,200

$23,400

Don’t know$7,800

$15,500(Correct)

$20,200

$23,400

Don’t know

Don’t understand

Just over a third (35%) of Ngāi Tahu respondents correctly identified that $15,500 is the amount

closest to the after-tax amount of New Zealand Superannuation, which is consistent with the national

results. However, significantly fewer respondents were unsure of the answer (26% of Ngāi Tahu c.f.

36% of New Zealanders).

The next chart displays Ngāi Tahu respondents’ perceptions of the amount by age group. Again,

correct knowledge (the light green line) tends to increase with age.

Page 112: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 110

32%

30%

33%

38%

48%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18-34 years 35-44 years 45-54 years 55-64 years 65+

$7,800 per year % $15,500 per year % $20,200 per year %

$23,400 per year % Dont understand % Dont know %

Amount closest to after-tax amount of NZ Super for single person living alone

Base: Varies by age groupSource: Q37 and Q75

Page 113: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 111

Income testing and asset testing

Respondents were asked two further questions to test their understanding of New Zealand

Superannuation eligibility criteria:

Q38) This next question is also about NZ Super. It is not about government pensions from

other countries. As far as you know, is NZ Super income tested?

Q39) Is NZ Super asset tested?

30%

28%

23%

20%

54%

44%

56%

50%

16%

27%

21%

29%

1

1

1

1

0% 20% 40% 60% 80% 100%

Yes No Don't know Don't understand

NZ Superannuation testing

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q38 and Q39

Ngai Tahu

Is NZ Super income tested?

Is NZ Super asset tested?

New Zealand

Ngai Tahu

New Zealand

Correct = No

Correct = No

Just over half (54%) of Ngāi Tahu respondents had correct knowledge that New Zealand

Superannuation is not income tested. This is significantly higher than the national average (44%)

and has been drawn from a comparatively smaller proportion of respondents who said ‘don’t know’.

Similarly, more than half (56%) of Ngāi Tahu respondents had correct knowledge that New Zealand

Superannuation is not asset tested. Again, this is significantly higher than the national average

(50%) and has been drawn from a comparatively smaller proportion of Ngāi Tahu respondents who

said ‘don’t know’.

The differences in age profile between the Ngāi Tahu survey and the national New Zealand survey

may help to explain why Ngāi Tahu respondents are more knowledgeable about New Zealand

Superannuation.

As illustrated in the following two charts, knowledge of New Zealand Superannuation not being

income tests, and not being asset tested, increases with age.

Page 114: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 112

33%

43%

56%

64%

85%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18-34 years 35-44 years 45-54 years 55-64 years 65+

Knowledge of NZ Super not being income tested by age

Base: Varies by age group Source: Q38 and Q75

36%

42%

61%

73%

81%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18-34 years 35-44 years 45-54 years 55-64 years 65+

Knowledge of NZ Super not being asset tested by age

Base: Varies by age group Source: Q39 and Q75

Page 115: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 113

Investing

Risk and return

To test respondents’ knowledge of the risk and return associated with investments, the following

questions were asked:

Now there are some questions about savings and investments. Please tell me whether you

think the following statements are true or false.

Q40a) An investment with a higher than average return is likely to have higher than average

risk.

Q40b) Even with good share investments, in the short term the value can usually be

expected to go up and down.

90%

88%

88%

90%

4%

6%

5%

3%

6%

5%

6%

6%

1

1

0% 20% 40% 60% 80% 100%

True False Don't know Don't understand

Ngai Tahu

New Zealand

An investment with a higher than average return is likely to have a higher than average risk

Even with good share investments, in the short term the value can usually be expected to go up and down

Statements about savings & investments

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q40a

Ngai Tahu

New Zealand

Correct = True

Correct = True

Most (90%) Ngāi Tahu respondents knew that an investment with a higher than average return is

likely to have a higher than average risk. This is consistent with the national results.

Likewise, most (88%) respondents also knew that even with good share investments, in the short

term the value can usually be expected to go up and down. Again this is consistent with the national

results.

Page 116: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 114

Risk of return well above market rates

Respondents were also asked:

Q41) Which one of the following would you recommend to someone who was considering

investing in an investment advertised as having a return well above market rates?

a) Consider it “too good to be true” and recommended they not invest

b) Recommend they invest lightly and see how it goes before investing more heavily

c) Recommend they invest heavily to maximise their return

Which would recommend to someone considering investing in investment advertised as having a return well above market rates

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q41

51%

42%

3% 3%

46% 46%

3% 4%1%

0%

20%

40%

60%

Correct - Too good to be

true

Invest lightly Invest heavily Don't know Don't understand

Ngai Tahu New Zealand

Half (51%) of Ngāi Tahu respondents stated that they would regard an investment advertised as

having a return well above market rates as being ‘too good to be true’, while two in five (42%) said

that they would recommend proceeding with caution by initially investing lightly. This is consistent

with the national results.

Page 117: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 115

Best return

Respondents were asked:

Q42) Which of the following is generally considered to make you the most money over the

next 15 to 20 years?

a) A savings account

b) A range of shares

c) A range of fixed interest investments

d) A cheque account

Which is generally considered to make most money over next 15 to 20 years

Base: All respondents Ngai Tahu (n=400), New Zealand(n=850)Source: Q42

38%

30% 29%

1%

49%

27%

22%

0%

20%

40%

60%

Fixed interest investments

Range of shares Savings account Cheque account

Ngai Tahu New Zealand

Just under a third (30%) of Ngāi Tahu respondents correctly said that ‘a range of shares’ is generally

considered to make the most money over the next 15 to 20 years, which is consistent with the

national results. However, when compared to the national results, a significantly smaller proportion

regarded ‘a fixed interest investment’ to make the most money (38% of Ngāi Tahu c.f. 49% of New

Zealanders), while significantly larger proportions considered ‘a savings account’ (29% of Ngāi Tahu

c.f. 22% of New Zealanders) and ‘a cheque account’ (1% of Ngāi Tahu c.f. 0% of New Zealanders) to

make the most money.

Page 118: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 116

Factors to consider with investment offers

Respondents were asked:

Q43) John Brown has saved $10,000 and he wants to invest it to make it grow. What things

should he take into account when he is looking at investment offers?

Respondents could give more than one answer. Categories that are similar to each other have been

grouped together and presented as a ‘nett score’ – this figure gives the percentage of respondents

that gave at least one of the more detailed suggestions (which are listed below the nett score).

73%

46%

35%

25%

14%

8%

7%

64%

53%

19%

27%

24%

8%

26%

21%

9%

22%

18%

7%

0% 20% 40% 60% 80% 100%

$10,000 to invest – what take into account when looking at investment offers

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850) NB: Figures in brackets are the NZ results. Responses less than 5% not depicted. Source: Q43

NETT RETURN

NETT DURATION

NETT LIQUIDITY

NETT COST

(Main reasons given) – all correct

Level of risk/spreading investments

How long want to invest for

How quickly get money back/liquidity

Organisation offering investment

When need savings

Secured or unsecured

Minimum investment period

Capacity/ability to take risk

NETT RISK (73%)

(49%)

(12%)

(9%)

(61%)

(57%)

(29%)

(29%)

(5%)

(23%)

(27%)

More information

Capital guaranteed

(27%)

(30%)

(8%)

Interest rate/tax on interest/return

Investigate options/look around

(18%)

(11%)

Fees

If minimum investment amount

(22%)

(8%)

(13%)

The most common factors (nett) taken into account when looking at investment offers are the risk

(73%) and the return (64%) of the investment, which is consistent with the national results.

When looking at the specific factors taken into account when looking at investment offers, the

following were mentioned significantly more frequently among Ngāi Tahu when compared to the

national average:

� the organisation offering the investment (35% of Ngāi Tahu c.f. 27% of New Zealanders)

� investigate options/look around (19% of Ngāi Tahu c.f. 13% of New Zealanders).

Page 119: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 117

Reducing risk

To test respondents’ understanding of how to reduce risk, the following question was asked:

Q44) Some people want to reduce the risk with their investments. I am now going to read out

some statements about reducing risk and would like you to tell me whether you think the

statement is true, false, or whether you don’t know. First if someone wanted to reduce the

risk with an investment they could (…). Is that true or false, or do you not know?

a) Take out capital guaranteed investments

b) Diversify their investment portfolio and have a variety of investments

c) Invest only in property

d) Change from high risk to low risk investments.

46%

49%

66%

74%

25%

15%

82%

79%

6%

8%

8%

7%

59%

70%

6%

7%

45%

40%

22%

18%

14%

14%

10%

13%

3

2

3

2

2

1

11

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

True False Don't know Don't understand Missing information

If wanted to reduce risk with an investment

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q44

Take out capital guaranteed investments

Diversify investment portfolio and have variety of investments

Invest only in property

Change from high risk to low risk investments

Correct = True

Correct = True

Correct = False

Correct = True

Understanding that to reduce risks with an investment, they could take out capital guaranteed

investments is consistent with the national results at 46%. Similarly, understanding that they could

change from high risk to low risk investments is also consistent with the national results at 82%.

However, only two thirds (66%) of Ngāi Tahu respondents understood that diversifying an investment

portfolio and having a greater variety of investments is a way to reduce risk. This is significantly

lower than the national average (74%). Similarly, only 59% of Ngāi Tahu respondents understood

that investing only in property will not reduce risk, which is significantly lower compared to the

national average of 70%.

Page 120: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 118

Warning signs of a scam

Respondents were asked:

Q45) Which of the following aspects about an investment would make you think that it might

be a scam?

a) ‘Promise of very high returns with little risk’

b) Being told the offer is only being made to a select few people

c) Being offered by a well known reputable financial organisation

d) The minimum amount they say you have to invest keeps reducing.

92%

88%

92%

91%

11%

13%

62%

74%

5%

7%

4%

5%

80%

81%

20%

12%

3

5%

3

3

8%

6%

17%

13%

1

1

1

1

1

1

1

1

1

0% 20% 40% 60% 80% 100%

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

True False Don't know Don't understand Missing information

Aspects of investment that might make it a scam

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q45

Promise of very high returns with little risk

Offer only being made to a select few people

Minimum amount to invest keeps reducing

Offered by a well known, reputable financial organisation

Correct = True

Correct = True

Correct = False

Correct = True

Most (92%) Ngāi Tahu respondents understood that the promise of a very high return with little risk

is probably a scam. This is significantly higher than the national average (88%).

The same proportion of respondents (92%) also understood that an offer only being made to a

selected few people is probably a scam, while four in five (80%) respondents understood that an

investment offer from a reputable financial organisation is probably not a scam. Both are consistent

with the national results.

Only 62% of respondents understood that an investment offer where the minimum amount to invest

keeps reducing is probably a scam. This is significantly lower than the national average (74%).

Page 121: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 119

Consumer rights and responsibilities

Internet banking password

No-one should ever share their Internet banking password with another person. The following

question in this section was intended to test how well understood this ‘rule’ was.

Q46) Would it be alright to tell someone else your Internet banking password in the following

situations?

57%

51%

4%

3%

19%

12%

42%

46%

95%

96%

79%

86%

1

2

2

1

2

1

0% 20% 40% 60% 80% 100%

Yes Correct - No Don't know Don't understand

Alright to reveal internet banking password in these situations

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q46

Telling your partner so they can pay some bills

Telling your friend who has internet access so they can pay your bills

Telling a bank staff member if they ask for it in the branch

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

As with the national results, Ngāi Tahu respondents’ understanding of their responsibility to protect

their Internet banking password remains strongest in relation to the importance of not telling a friend

(95%).

However, in relation to telling a partner, 57% thought this was okay, which is significantly higher

than the national average (51%). Furthermore, 19% of Ngāi Tahu respondents incorrectly thought it

was okay to tell a bank staff member their password, which is significantly higher than the national

average (12%).

Page 122: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 120

Financial advice

Respondents were asked:

Q47) I will read out a number of statements about getting financial advice and I would like you

to tell me whether you think the statement is true or false, or whether you don’t know.

Statements about getting financial advice

Base: All respondents Ngai Tahu (n=400), New Zealand (n=850)Source: Q47

Before handing money to a financial adviser, a person should ask about their qualifications and experience

Before investing, it is important to read and understand the investment

statement that explains details about the investment

It is important to find out how a financial adviser is being paid

94%

97%

94%

93%

76%

71%

75%

79%

2

2

3

13%

15%

4%

2

3

3

3

4%

10%

13%

19%

18%

2

1

0% 20% 40% 60% 80% 100%

Correct - True False Don't know Don't understand

A financial advisor has to give you a disclosure statement

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Ngai Tahu

New Zealand

Almost all (94%) Ngāi Tahu respondents correctly agreed that before investing, it is important to read

and understand the investment statement that explains details about the investment. This is

significantly lower than the national average (97%).

The same proportion of Ngāi Tahu respondents (94%) correctly agreed that before handing money to

a financial advisor, a person should be asked about their qualifications and experience, 76% agreed

that it is important to find out how a financial advisor is being paid, and 75% agreed that a financial

advisor has to give a disclosure statement. These are all consistent with the national results.

Page 123: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 121

KiwiSaver

Respondents were asked a series of questions about KiwiSaver:

Q64) Are you a member of KiwiSaver?

If a member: Q65) What year did you become a member?

Q66) Are you currently contributing?

Q67) What percentage of your wages or salary are you personally contributing at the

moment? Please exclude any employer contributions.

The results are presented in the next two charts.

KiwiSaver – whether member and year became a member

Base: All respondents (n=400)Source: Q64

36%

63%1%

Yes No Don't know

Base: Respondents who are a member of KiwiSaver Ngai Tahu (n=151), New Zealand (n=229)Source: Q65

Year became a member

43%

51%

6%

n/a

52%

25%

18%

5%

0% 20% 40% 60%

2007

2008

2009

2010

Ngai Tahu New Zealand

In 2009, 29% of New Zealanders said they were members of KiwiSaver.

Base: All respondents (n=850)Source: Q64

Just over a third (36%) of Ngāi Tahu respondents are KiwiSaver members. This is a significantly

higher proportion when compared to the national results where only 29% said they were members in

2009. However, some of this difference is likely to be attributed to the continued growth in the

uptake of KiwiSaver in general.

Of the Ngāi Tahu respondents who are KiwiSaver members, just over half (52%) joined in 2007 with

slightly smaller proportions joining each subsequent year.

Page 124: Ngai Tahu Financial Knowledge Report · 2010 ANZ Ngāi Tahu Financial Knowledge Survey PREPARED FOR Te Rūnanga o Ngāi Tahu ATTENTION Andrew Scott or Teone Sciascia ISSUE DATE August

Colmar Brunton Page | 122

Analysis by knowledge group (among Ngāi Tahu respondents)

Ngāi Tahu KiwiSaver members tend to have higher levels of financial knowledge:

� 45% of Ngāi Tahu KiwiSaver members are in the High knowledge group compared to 37% of those who are not members

� 23% of Ngāi Tahu KiwiSaver members are in the Low knowledge group compared to 32% of those who are not members.

Analysis by Whai Rawa membership

Members of the Whai Rawa savings initiative are significantly more likely than non-members to be part of KiwiSaver (45% of Whai Rawa members c.f. 30% of non-members).

KiwiSaver – whether currently contributing and percentage personally contributing

Base: All respondents who are current KiwiSaver members (n=151)Source: Q66

81%19%

Yes No

Base: Respondents who are a member of KiwiSaver and currently personally contributing Ngai Tahu (n=123), New Zealand (n=192)

Source: Q67

6%

7%

7%

64%

15%

3%

10%

4%

4%

47%

32%

0% 20% 40% 60% 80%

Ngai Tahu New Zealand

Personal contribution

In 2009, 83% of New Zealanders said they were currently contributing to KiwiSaver.

Base: All respondents who are currently KiwiSaver members (n=229)Source: Q54a

2%

4%

8%

Not a wage earner

Other

Don’t know

Of the Ngāi Tahu respondents who are currently KiwiSaver members, around four in five (81%) said

that they are currently contributing to their KiwiSaver fund. This is consistent with the national

results.

Most respondents who said they are contributing, contribute 4% (47%) or 2% (32%). However,

when compared to the national results, Ngāi Tahu are significantly more likely to contribute 2% or

‘other’ and less likely to contribute 4%.