NZ Herald 4 October 2025

AFirstly, I welcome your question. I hear too often from well off readers, and too little from others.

You’ve hit hard times — made even harder if you can’t open a bank account. But there’s a solution.

“People without a fixed address can still open a bank account, although the process can be a bit more challenging,” says a Reserve Bank spokeswoman.

“Banks are required to comply with Know Your Customer (KYC) obligations, which means verifying a person’s identity and their address. Where someone doesn’t have a permanent home, there should be alternative options for banks to verify a temporary address. For example, a bank may accept a temporary address or a letter from a trusted organisation, such as a housing provider, or a community support agency, to meet address verification requirements.”

As a first step, contact your local Citizens Advice Bureau (CAB) — see cab.org.nz, or a financial mentoring service, which you can access through moneytalks.co.nz. Both offer free services.

“These organisations can help people to get access to a bank account, such as helping people to get ID or a proof of address letter,” says the spokeswoman.

Another suggestion is to contact Westpac, which has started a “basic bank account,” designed for people in your sort of situation.

Meanwhile, the broader issue is being addressed. “At the Reserve Bank, we are working with banks and regulators to make access to accounts easier. The Council of Financial Regulators will publish decisions later this year on options to enable everyone to access simple transaction accounts,” says the spokeswoman.

“Finally, RBNZ supports efforts to remove barriers to accessing basic banking services through reforms to AML/CFT requirements being led by the Ministry of Justice.”

You wrote to me some time back. I do hope you have found a job and a home in the meantime.

AIt’s a scam! I replied to you right away but, with your permission, I’m running your email here in case others are caught up in this.

This scam first emerged on Facebook and Instagram in mid-August. I ran a warning in my August 23 column and on my website, and the Weekend Herald ran an article about it. But clearly you and others didn’t get the message. It’s worrying.

My first question to you was whether you had sent them any money. Your reply: “Not directly, I have my own Hatch account. I invested in three shares that they recommended. One of them lost money on Friday and they wanted my bank account to give me ‘compensation’ on the share loss. That’s when I became suspicious.”

Phew! I hope nobody else has sent them money, or bank account details. Anyone who has should contact their bank immediately, and also contact Netsafe or ownyouronline.govt.nz

It’s interesting that the crooks are offering to give you money, rather than taking it from you. They might even live up to their offer, a clever way to increase your trust in them — and to obtain your bank details.

If you continued, somewhere along the line you would be sure to give them way more money than they ever gave you. And that’s the last you’d see of it.

In case anything like this emerges again: I will never be involved in any scheme of this kind. I earn a living as a free-lance journalist, giving talks, writing books, and sitting on a few non-profit boards. That’s all.

By the way, I note that you are a professional person, and clearly an accomplished one. Anybody can get caught up in a scam!

APicture this: Your $203,000 balance has dropped to $100,000.

Your aggressive KiwiSaver fund will almost certainly be largely invested in shares. And while it’s rare, sharemarket indexes have halved at times over the decades. Sometimes it’s taken several years to get back to where you were. Will you stick with your investment when it plunges?

You seem to tick the boxes for ability to weather a storm:

• You have a mortgage-free home, and presumably no other debt.
• You earn plenty, and it sounds as if you have other savings for an emergency, such as a job loss.
• You seem to be determined to stick with your aggressive fund through thick and thin, over at least 10 years — and in your case it sounds like 20 years.
• You plan to move the money to lower-risk funds as you approach the time to spend it — although there’s no need to move it all in your early 60s. It’s a good idea to leave the money you plan to spend later in your retirement in higher risk.

While the state of the world is worrying these days, we’ve been there before, and over the long term share values have always fluctuated but trended upwards.

You’re quite right that returns have been extraordinary recently — and way ahead of bank deposit interest. Both the New Zealand and world share indexes floundered early in the year, dropping to lows in April after US President Trump announced aggressive tariffs.

But since then they have rebounded. The S&P NZX50 share index has grown 14% just since April, and the MSCI world index has grown an astonishing 32%. You missed about half the gains by starting in May, but still you’ve done really well.

On keeping your KiwiSaver with your bank, I don’t think that’s necessary. Their schemes tend to be lacklustre. And you won’t pay extra fees elsewhere. In fact, in several low-fee providers you’ll probably pay considerably less.

AIt’s a good idea to move some of your savings to a KiwiSaver balanced fund. But I wouldn’t use that money for rates or emergencies or holidays — unless the holidays are several years away.

Balanced funds typically invest roughly half their money in shares, and most of the rest in bonds. Shares are volatile, as discussed above. And bond returns can be volatile too, with downturns when interest rates rise because older bonds, issued at lower interest rates, lose value.

It’s no great surprise, then, that in two of the last ten years, balanced KiwiSaver funds recorded small losses. In the year ending March 2020, in the Covid downturn, the average return after fees and tax was minus 0.9%. And in the year ending March 2023, it was minus 2.6%.

But I don’t want to scare you off! In 2024 the average return was 10.7%. And in 2021 it was a huge 17.4%. In several other years it was more than 5%. And don’t forget, when comparing this with term deposits, that these returns are after fees and tax. Over time, you will almost certainly get higher average returns than in the bank.

The way to cope with the ups and downs is to plan to spend the balanced fund money in roughly three to ten years. Your short-term spending money — for rates, emergencies, food, power, transport and so on, plus hopefully some fun — is best left in term deposits and bank accounts.

Every year or so, move some money from your balanced fund to the bank, to keep about three years of spending money in cash. Be a bit flexible. If the balanced fund balance has fallen lately, you could delay the move for a while. And if it’s done well lately, you could move a bit more than usual.

I hope you do use a balanced fund. It could well mean that you’re able to have more than occasional holidays.

AGood on you — or, as they say in America, good for you!

I’m not sure a US adviser would be the first person I would turn to for advice on the New Zealand property market. But many retired landlords find that the hassles and expenses — sometimes unexpected — are something they can do without. They have better things to do with the money.

ARenting out the holiday home would, of course, be one way to free up some cash — albeit much less than if they sold the property. But see the above Q&A.

Still, it might be worth it for people wanting to keep the place for children to inherit, or simply because they love to go there. Last week’s correspondents made no mention of either of those issues.