A Labour government will shift the retirement age to 67, but one Tauranga financial planner is warning this won't change people's approach to saving for their senior years.

Under Labour, the eligibility age for superannuation will gradually increase from 65 to 67 years throughout a 22 year period.

Labour candidate for Tauranga, Deborah Mahuta-Coyle, says this policy, coupled with compulsory KiwiSaver superannuation, will give people a bigger retirement fund.

Labour will make the change by increasing the age by two months from 2020, until it reaches 67 in 2033.

Deborah says anyone currently aged under 45-years will be eligible for the pension at 67.

Those aged over 57 will be unaffected by the change.

Investment Research Group Bay of Plenty financial advisor Jonathan York says the biggest issue New Zealanders face is saving for their retirement.

'In comparison to Australia, where they have compulsory super, they do have a savings plan in place.

'When we get to 65 we expect that super will automatically be able to cover our retirement – and that is not really the case.

'In Australia they have compulsory super so they do have a savings plan in place.

'Arguably, increasing the age gives people a couple more years to make some savings before they start spending it.”

Jonathan says many New Zealanders do not think about saving for retirement when they are 20-years-old, and it is not until they reach their 40s that retirement becomes a priority.

'The biggest problem is that Kiwis get to 45 to 50 and think they better start saving for retirement, but by then is probably a bit too late.

'If you are only starting to save then, it doesn't give you a lot of time.”

National candidate for Tauranga, and incumbent MP, Simon Bridges, says 65 is a sustainable age for retirement, particularly with his party promising to balance the books by 2014-15.

'Labour's policy is according to them – ‘brave', but the fact is they are not going to start raising the age until 2020 and it won't finish until 2033 – I think it is just empty rhetoric.”

'The costs actually are not that great, I don't think there is a need to change; providing we are prudent and get our books under control.”

Labour will make KiwiSaver compulsory and increase employer contributions by 0.5 per cent a year, from three per cent in 2014 to seven per cent by 2022.

Employee contributions will remain at two per cent with students, beneficiaries and the self-employed being exempt under Labour.

'We will keep employee contributions the same, so people can still cope with the cost of living, but also save for their retirement.”

Jonathan says making KiwiSaver compulsory is necessary as the government will not be able to sustain the cost of superannuation.

'If you look at the figures, I think it is in 2030, 48 per cent of the population will be on super – you cannot sustain those levels of expenditure.

'I think it (KiwiSaver) is probably going to come in at some time.

'If you look at the books they don't stack up.”

National plans to increase employee contributions to three per cent.

Simon says businesses will be hit hard by Labour's policy to increase KiwiSaver contributions when combined with a minimum wage rise and increased capital gains tax.

'It will substantially increase costs on businesses.

'At the moment we are right in the mix of Europe and America facing the worst economic crisis – we should not be putting further cost on businesses.”

Jonathan says increased employer contributions are another burden on businesses in tough times.

'It is a tough pill to swallow.”

Green Party Tauranga candidate Ian McLean says the Greens do not support a raise in the age of superannuation and want to instead focus on flexibility within the superannuation scheme.

'We will leave it at 65, but this is certainly under discussion.

'We recognise that the average age is getting older and people want to work longer.

'We want to focus on ensuring flexibility, so if people want to continue working they can.”

Ian says increasing employer contributions to KiwiSaver will increase the costs to small and medium businesses and the Greens will look to keep KiwiSaver a voluntary scheme.

'I have been talking to a lot of people running small and medium businesses and most employers are concerned about the increasing minimum wage, with the added contribution from KiwiSaver they are going to get hit in two ways.

'Many businesses are struggling and we do not want to push them under.”

National is proposing a KiwiSaver system where people are opted into the scheme, but can opt out if they want.

Simon says this is critical as people need to retain the choice while increasing the number of people enrolled in KiwiSaver.

'Choice is very important as there are a whole range of individual circumstances and lifestyles and it may not be the best option economically to be in KiwiSaver, perhaps a couple needs to pay off their mortgage faster, or a small business owner is better placed to put spare money back into their business.”

Deborah says Labour will also spread the $1000 kick-start over a five year period, at $200 a year to spread the cost across the government books.

Under the current KiwiSaver scheme members are entitled to a $1000 kick start from the government when they sign up, and this is made as a one-off payment.

Labour will restart contributions to the New Zealand Super Fund starting with $750 million in 2012-13, increasing to around $2.4 billion a year by 2016.

Simon says making KiwiSaver compulsory will increase the costs of the government.

'They are adding a significant cost to government, all of which will have to be borrowed from overseas – borrowing money from overseas for savings does not make sense.”

'In the short term it puts ordinary people's jobs at risk and in the long term it creates a less business friendly environment and less business confidence.”

New Zealand First Tauranga candidate Brendan Horan says NZ First wants to keep the retirement age at 65 and make KiwiSaver compulsory but look to reduce fees.

'Making it compulsory will not raise the cost to the government as all of the savings are going into a consolidated fund.”

Brendan says NZ First will provide support to small businesses by lowering business tax to 27 per cent across the board.

The rate of super will remain at 66 per cent of the average wage under all party policies.