Sean Clark- Financial Advisor

NEWS UPDATE.

New Zealand’s economy continues to face economic headwinds, predominantly soaring inflation and rising interest rates, as the effect of the pandemic remains apparent.

As well as these headwinds, the country is also grappling with ongoing labour shortages, especially in the services sector, yet activity is experiencing a slowdown within several industries.

According to Principal Economist, Christina Leung: “Cost pressures remain intense for households and businesses, and this is driving pessimism. Central banks around the world have responded to the surge in inflation by increasing interest rates at a rapid clip. While this is having the intended dampening effect on demand, there are concerns activity will slow to the point of pushing economies into recession.”

The household sector continues to feel the greatest impact of higher interest rates, with a sharp decline in house sales and easing property prices.

Check out the full blog post here:
https://www.devere-newzealand.nz/news/Economic-headwinds-still-rife-in-New-Zealand

The pensions minister has admitted his own gold-plated public sector pension is “not sustainable”.

Guy Opperman, Britain’s longest-serving pensions minister, said that defined benefit or "final salary" style public sector pensions, where risk is underwritten by taxpayers, “should be reformed”.

“It is not sustainable for this state, or any state, on a long-term basis. It’s a practical reality… We are going to move to a different type of pension scheme, and the public sector is the last bit,” he said in an interview with the Sunday Times.

Doctors, civil servants, politicians, teachers, and others employed by the state receive pensions that have a guaranteed income which increases each year by inflation, meaning they are safeguarded against the worst of the cost of living crisis.

Private sector workers have to make do with "defined contribution" schemes where retirement income is dependent on stock market returns.

Members of public sector schemes are also protected from many of the penalties of the lifetime limit on pension savings. Their lifetime allowance is calculated by multiplying their retirement income by 20, meaning they receive more than double the income of a private-sector worker before breaching the cap.

Read the full article here: https://www.telegraph.co.uk/pensions-retirement/news/pensions-minister-admits-gold-plated-pension-unsustainable/?li_source=LI&li_medium=liftigniter-rhr