UPDATE: Smokers and Insurance - How Much You Can Save By Quitting

UPDATE: With the next New Year's cigarette and tobacco price increase about to take effect and plain packaging about to become mandatory throughout New Zealand, it's more important than ever to consider the possible benefits to your health and your wallet of quitting. 

Statistics estimate that 15% of adult New Zealanders smoke, or a total amount of around 550,000 people. Smokers in New Zealand have it tough in so many ways, and it's about to get even tougher. Not only are smokers mired in an unhealthy and destructive habit, every year this habit takes more and more out of them financially. Since 2010, due to new tax laws passed by parliament, the price of cigarettes and tobacco has risen dramatically.

A pack of 20 cigarettes has risen from around $13 to between $22-27 in 2017 (between $24-30 in 2018) depending on the brand of choice. With 10% tax increases set in law at least until 2020, smokers can expect that they will soon be paying upwards of $30 per pack or $1.50 for each cigarette. A pack a day smoker will be out $200 per week, a cost likely higher than all their groceries for the week combined.

In 2017, each of these set their owner back over $1 a piece. In 2018, the cost is set to rise yet again.

Unfortunately, that's not all a cigarette habit can cost. If you're a smoker and you have personal risk insurance in the form of life, trauma, TPD, income protection or health/medical insurance, you're paying a lot more in premiums than non-smokers are. This is because as a smoker, you are more likely to develop serious health conditions and thus, you pose a much higher risk to the insurer. How much more will a smoker pay? In some cases it can be up to double the amount of a non smoker of the same age.

The good news is, that if a smoker manages to quit, their premiums can be revised and changed down to a non smokers level if the smoker manages to maintain it for a significant period of time. For instance, if you quit smoking 12 months ago and are paying smoker premiums on your insurance, you will be eligible to apply for changes and have your costs significantly reduced. A pack a day smoker who manages to quit could easily save between $12,000-$15,000 a year through not having to pay for smokes combined with the savings on their insurance. That is enough for a significant vacation, a brand new car or many many shopping sprees. Even those who only smoke a pack or two a week could save around $5000 a year by cutting it out.

With the cost of the habit now sure to increase further in the years to come, now could be the time to dial it back or endeavour to quit entirely. Your wallet would definitely thank you for it.

www.sprattfinancial.co.nz

The Financial Implications of NZ's Aging Population

National’s election policy of increasing the superannuation eligibility age has reignited talk about NZ’s aging population and its various implications. There are several reasons behind the aging population including ‘baby boomers’ getting closer to retirement, falling birth rates, and improving healthcare leading to people living longer. The chart below, projecting the number of New Zealanders who aren’t of working age, illustrates the extent of the issue. Currently, just over 1.6 million people are either over 65 or younger than 15. This is expected to almost double over the next 50 years to just shy of 3 million people (almost half the total population).

It’s not just us here in New Zealand who are going through this. Most developed nations are in the same boat - Japan being the worst, with 40% of their current population not of working age and their total population actually in decline! The implications of this are much wider than simply the Government’s ability to provide pensions to a growing number of people. It negatively impacts economic growth and overall productivity, with fewer people to turn the cogs.

So how do we solve this issue? There are a few options. One very complex solution involving changing people’s behaviour, is to increase the birth rate. Another is to speed up the adoption of robotics and automation to replace retirees. This will contribute to solving the issue, but requires a lot of investment and won’t necessarily be able to keep pace (50 years ago people were sure we’d have flying cars by now). But it does open opportunities for innovative companies and those catering to the needs of ageing consumers. Another option, and quite possibly the simplest of the lot… immigration. 

We specialise in assisting clients near or in retirement to manage their nest egg to best suit their future needs. You can email us anytime for our latest SPRATT FINANCIAL Term Deposit rates (0.1% Platform fee).

Contact our Financial Advisers at investments@spratt.co.nz
Visit our official website for more information.

Smokers and Insurance: How much you could save by quitting.

Statistics estimate that 15% of adult New Zealanders smoke, or a total amount of around 550,000 people. These smokers in New Zealand have it tough in so many ways. Not only are they mired in an unhealthy and destructive habit, every year this habit takes more and more out of them financially. Since 2010, because of new tax laws passed in parliament, the price of cigarettes and tobacco has risen dramatically.

A pack of 20 cigarettes has risen from around $13 to between $22-27 in 2017 depending on the brand of choice. With 10% tax increases set in law at least until 2020, smokers can expect that they will soon be paying upwards of $30 per pack or $1.50 for each cigarette. A pack a day smoker will be out $200 per week, a cost likely higher than all their groceries for the week combined.

In 2017, each of these set their owner back over $1 a piece.

Unfortunately, that's not all a cigarette habit can cost. If you're a smoker and you have personal risk insurance in the form of life, trauma, TPD, income protection or health insurance, you're paying a lot more in premiums than non-smokers are. This is because as a smoker, you are more likely to develop serious health conditions and thus, you pose a much higher risk to the insurer. How much more will a smoker pay? In some cases it can be up to double the amount of a non smoker of the same age.

The good news is, that if a smoker manages to quit, their premiums can be revised and changed down to a non smokers level if the smoker manages to maintain it for a significant period of time. For instance, if you quit smoking 12 months ago and are paying smoker premiums on your insurance, you will be eligible to apply for changes and have your costs significantly reduced. A pack a day smoker who manages to quit could easily save between $12,000-$15,000 a year through not having to pay for smokes and the savings on their insurance. That is enough for a significant vacation, a brand new car or many many shopping sprees. Even those who only smoke a pack or two a week could save around $5000 a year by cutting it out.

With the cost of the habit now sure to increase further in the years to come, now could be the time to dial it back or endeavour to quit entirely. Your wallet would definitely thank you for it.

www.sprattfinancial.co.nz

                                     

The effect of Brexit on your investments.

In the wake of the historic referendum that resulted in Britain's decision to leave the European Union, there has been much financial and economic concern about what this may mean for investments and finances worldwide. Since the result was announced, the British Pound has fallen to 30 year lows, including a 7% fall against the New Zealand dollar.

Here in New Zealand, Kiwi investors are being urged not to panic. John Berry of Pathfinder said NZ investors shouldn't expect a great impact from the result largely because New Zealand's market is largely insulated against the fall that could continue in the United Kingdom and Europe. He went on to say though, that any global downturn that occurs could have an impact on confidence and equities that could permeate our marketplace.

Other advisers have said that if you are long term investor, this will eventually be seen as merely a momentary blip. Short term investors could suffer a degree of loss, but most experts expect that markets will rebuild. Nick Tuffley, ASB chief economist stated that though there is little danger of a significant long term loss, "people need to think about what they are doing and why - whether their objective has been changed by what has happened."

If you are concerned with the impact that Brexit could have on your investment or your finances, our professional investment team offer you free, no obligation advice or reviews at any time through our contact form here. 

Breaking News (June 2015)

1. Do you have a plan for who will manage your money if you can't? - NZ Herald

If a family member suffers a severe illness or accident and can't continue to manage their affairs, you don't want legal wrangling and financial stress added to your burdens. It's always best to make sure you have a written plan and/or legal will in place so that you and your dependants will be okay if the worst happens.

2. AIA announces profit growth. - Good Returns

One of New Zealand's premier insurers has announced an underlying growth of 21% in profits for the year for the 12 months to November 30th 2014.

3. Self-driving cars: Insurers sceptical about impact on business. - Insurance Business Online

84% of business executives surveyed in the US did not expect the self-driving car to impact business until 2025 but are they ignoring the speed of a revolution? Industry insiders saying Self-driving vehicles could completely revamp the structure of Vehicle Insurance worldwide.

4. Humor: Insurance Fraudster tries to cash in a claim on a fake dead cat. - Insurance Business Online.

An American man has demanded an escalating amount in successive claim requests for emotional damage inflicted by the death of his cat in a car accident. The problem: There is no such cat and the pictures he supplied were of two different cats from Google.

5. Average Auckland house price up $100,000 in a year, but available listings down. - Interest.co.nz

Auckland housing boom continues as New Zealand's largest real estate agency sold a record number of houses in May, showing no sign of the usual winter downturn.

6. Flooding: Insurance claims reach towards $10 million. - Stuff.co.nz

Insurers have received close to 2,000 claims after severe flooding in the lower North Island over the weekend of the 20th June.

7. Annual health insurance payouts rise by $38 million. - NZ Herald

Following on from a previous story posted on the blog, the annual health insurance payout figure has been revised upward yet more. This is the first time since the statistics have been kept that $1 billion has been paid out in claims nationwide.

8. Cold snap hits New Zealand: Could we see record low temperatures? - NZ Herald

Ice and snow covers South Island roads and last week, Queenstown airport was forced to cancel a day's worth of flights. The record low tempearture recorded in New Zealand of a shocking -25 degrees may be under threat if the cold continues. Drivers are urged to stay safe on the road and to keep alert and warm.

Visit our official website at www.sprattfinancial.co.nz.

Timelapse of the Giant Poppy Project - Video

Further to our previous post on the Giant Poppy in Auckland Domain for ANZAC Day, here is an amazing timelapse video of the poppy being assembled and filled in over time with thousands of messages of support and remembrance from New Zealanders.

Click here to see the video now.

Remember that the Poppy is available to view until tomorrow, so if you haven't done so, we highly recommend you get down and see it for yourself. Definitely a great project and one that Spratt Financial Group is proud to have supported.

Giant ANZAC Poppy - Auckland Domain

This ANZAC Day, Spratt Financial Group is truly proud to be involved in supporting the creation of the world's largest poppy in Auckland Domain. The poppy is made up of thousands of red discs, inscribed with messages of remembrance and support from everyday New Zealanders from all walks of life. It is a moving experience to behold as I did when I took the photos below. It is especially incredible now as the poppy is completely filled in, ready for the breaking of dawn on ANZAC day.

The world's largest poppy up close.

The red discs with messages of support and honor from New Zealand.

We encourage everybody in the area to get down and see the poppy for yourself. It truly is an amazing project, and it will be the site of a spectacular dawn service on ANZAC day as well. Spratt Financial was delighted to get involved, providing insurance for the poppy itself and its creators free of charge. It is the least we can do to help bring this to life.

The poppy, beginning to take shape.

We wish all New Zealanders and Australians a wonderful ANZAC day and we hope you will all take time to remember the sacrifices of the ANZACs and all those who gave their lives defending our country and our way of life. And now, you can view a special timelapse video of the poppy coming together here. Be sure to check it out.

Waitangi Day Reflections

Whenever I get a guest or a visitor from overseas, they without fail will remark that every little thing about our country is beautiful. The way that we can walk a minute from our houses, stand on the crest of a rise and see out over the harbour to Rangitoto Island. The forests that line the roads, the farmlands, the beaches, the mountains. Everything. These things somehow become normal to us, the ones lucky enough to live here, and we find ourselves just being numb to it all. Waitangi Day should be a day when we remember how lucky we are to live in New Zealand, one of the most beautiful places in the world. To that end, here are some pictures of our scenic wonders to help us all remember, and be thankful.

Happy Waitangi Day everyone and enjoy your day off!

Lake Tekapo, South Island.

                                     

Milford Sound.

Mt Ruapehu and Mt Ngauruhoe by Craig Potton

Cathedral Cove, Coromandel.

Hot Water Beach, North Island.

Wellington City.

Auckland City.

NZ Native Kauri Forest

Black Caps vs India Third ODI, Eden Park

Wait, a tie?

How am I supposed to feel?

How are the Indian supporters supposed to feel?

None of us knew. Attending the third cricket One Day International at an almost sold out Eden Park was an experience. The sun was baking, the atmosphere generated by the 28,800 supporters was intense, and the cricket itself was the craziest, most amazing game I'd ever seen.

Brendon Mccullum and the Black Caps, not quite sure how to react to the thrilling tie.
Credit: stuff.co.nz

For those who don't know the machinations of cricket, having a tie occur after both sides have batted is exceedingly rare. In this case, it was even more strange given the massive scores both teams managed to achieve. But happen it did. The ground was packed with great Indian supporters, who just judging by the sound, outnumbered us Kiwis 3 to 1 on the day. Every Indian boundary or six was greeted with a deafening sea of cheers, waving Indian flags and chanting. Every New Zealand wicket was greeted by a round of muted applause and some scattered cheering. Oh well, now I know what a cricket game on the subcontinent would be like!

The game swung to India. Then it swung back to New Zealand. Then back to India. I looked at the tickets, and they made no mention of people with heart conditions needing to be careful, which seemed like a tremendous oversight. (I hope they had medical cover :) ) In the end, as I was leaving the ground, I supposed a tie was the fair result for a game when neither side could quite get on top enough to finish the other one off.

Relive all the action here with the highlights and massive amounts of respect to India and the Indian supporters for showing us how to be passionate about our team.

Superannuation: New Transtasman Portability

Recently, it has become possible for any superannuation fund in Australia to be transferred across the Tasman into your New Zealand Kiwisaver fund.

If you have at any time lived or worked in Australia and had any of your income transferred into an Australian super fund, you can now bring your fund across. Also, if you have done business with a financial adviser across the Tasman and lost contact upon your return to New Zealand, your super fund doesn't have to be lingering in financial limbo anymore. Just get in contact with us and we’d be happy to assist with all aspects of the transfer. The only limitation on this Trans Tasman portability is that your former Australian super fund must be converted into Kiwisaver.

Now you can transfer your Australian superannuation fund into a Kiwisaver account.

"A recent change in Australian legislation means that from July 2013, New Zealand residents will be able to transfer their eligible Australian superannuation savings into their ASB KiwiSaver Scheme account. Members who permanently emigrate to Australia will also be able to transfer their KiwiSaver savings to an Australian complying superannuation fund that accepts the transfer.

If your Australian funds are transferred into your KiwiSaver account, they will be subject to KiwiSaver rules and regulations; however some Australian superannuation rules will still apply.

You will be able to withdraw the Australian-sourced portion of your KiwiSaver account at 60 years of age, if you fulfill the Australian definition of "retired".

Transfers of Australian superannuation funds to your KiwiSaver account will not be considered eligible contributions for the purpose of receiving any member tax credits." 

- ASB Official Superannuation Transfer Information

If you are unsure of whether or not you may have money sitting in an Australian fund somewhere, we can help you with that too. Finally, although the ability to transfer your superannuation from Australia is a new feature, transferring your pensions from the UK is also possible for those who have previously made residence there. If you need any more information, just let us know, and don't leave your funds in limbo overseas when they could be benefiting you here and now!

How to contact us.

Our investment specialist, Ross Wallace (AFA).

  

New Zealand's Unique Investment Advantages

As New Zealanders, we should wake up each morning thankful to live in such a beautiful country. Our scenic wonders are unmatched and we are internationally regarded as a prime and sought after tourist destination. However, our environment and our people aren't all we have to offer. New Zealand also offers unique advantages in business, and our investment environment is safe and prosperous. This article will investigate why New Zealand is a great place for your investments.

Key Awards and Statistics

An under reported fact is that New Zealand has recently ranked first in the world in three investment categories:

1. Protecting Investors (World Bank Doing Business Report 2013)
2. Starting a Business (World Bank Doing Business Report 2013)
3. Lack of Corruption (Transparency International Corruption Index 2012)

Anti corruption agency Transparency International continues to rank New Zealand as Number One for honesty and integrity in its public sector, having now achieved this status for seven consecutive years. Thus, New Zealand offers an unmatched record of safety for your investments that currently no other country can match.

Our economy is in a stronger position than many western economies, having weathered the brunt of the world economic crisis and emerged in a healthier state when compared to states in the European Union and the USA. Whilst no economy can be said to be invulnerable, we are relatively isolated from the travails in Europe and the US and have strong ties to emerging and thriving economies in Asia.

We boast a wide range of free trade agreements with other nations, a simple tax code (the third lowest in the OECD in terms of time taken for taxpayers to comply with tax obligations, December 2010) and an absence of import tariffs or Government subsidies, facilitating both domestic and foreign investment.

List of Nations New Zealand has Free Trade Agreements With:

- China
- Australia
- Vietnam
- Phillipines
- Cambodia
- Brunei
- Indonesia
- Hong Kong
- Myanmar
- Thailand
- Malaysia
- Laos
- Singapore
- Chile

Negotiations are also under way with India, Korea, Russia, Belarus and Kazakhstan, and New Zealand is a key driver behind the Trans Pacific Partnership.

A 'Can Do' Culture

If you need an environment that fosters success, banishes negativity and finds innovative solutions all built upon a foundation of entrepreneurship, dedication and hard work, New Zealand is the place. As a smaller nation of less than 5 million people, New Zealand achieves big on the world stage even with fewer resources than its chief competitors. This is a testament to the attitude of the New Zealand people and the positive business environment they have cultivated, in which more is made from less and we seldom take no for an answer!

Esteemed Position and Strong Currency

Finally, New Zealand is among the top 20 rated sovereign nations in the world. Standard and Poors gives New Zealand an AA+ Local Currency Rating, an AA foreign currency rating and an AAA T&C assessment. Furthermore, the New Zealand dollar is trading very strongly against the $US the Pound Sterling and the Euro, meaning that making New Zealand dollars through investments will go a long way in the international marketplace.

Source Credit: http://www.nzte.govt.nz/en/invest/new-zealands-investment-advantage/

If you are interested in making investments and taking advantage of our country's unique advantages, email Ross Wallace (Authorised Financial Adviser) at ross@spratt.co.nz.

Find out more about our investment services.

Ross Wallace (AFA) profile.