ANZ New Zealand is calling for a change to the terms and conditions that govern the default KiwiSaver provider schemes to prevent a potential $14 billion retirement savings ‘time bomb'.

The call comes in a statement made by ANZ wealth managing director John Body.

He says research by ANZ Wealth and OnePath estimate that under the current default settings about 191,000 New Zealanders could potentially face a shortfall of $72,000 each in their final account balance when they turn 65.

This compares with the final balance an average member could experience after 40 years with an investment strategy that changes as the circumstances of their lives change.

This ‘life stages' investment strategy – sometimes called the ‘Lifetimes gradually adjusts an investor's fund allocation from growth-oriented assets to income-oriented assets, based on each individual's length of time to the retirement age.

John says this ‘ticking time bomb' inside KiwiSaver was a $14 billion shortfall for current New Zealand savers and would continue to blow out as more people enrolled in the scheme in coming years.

'Our research demonstrates that over the long term, investors are likely to be significantly better off through the life stages approach than with the current default ‘conservative option'.

'A life stages approach tends to lift overall performance and moves investors to more defensive investments as they get closer to retirement.”