What Changes Have Been Made to KiwiSaver?

What changes have been made to KiwiSaver?

Government’s annual contributions

From next year, the government is halving its annual contribution to KiwiSaver members to $260.72. However the rules around qualification for the supplement remain unchanged: you must contribute at least $1042.86 per year and live mainly in New Zealand.

The payment is also being means tested, so those in the top tax bracket, earning over $180,000 per annum, will miss out on the government’s contribution entirely.

Employer and employee contributions

Starting from next April, the default rate of contributions for employers and employees is increasing from 3% to 4% of a person’s wage. The increase is being introduced in two parts, spread over three years, to allow people to prepare for the extra costs involved.

Default KiwiSaver contribution rates will increase:

• From April 1, 2026: default rises to 3.5%.
• From April 2028: default rises to 4%.

In the long term, this will increase the retirement savings of KiwiSaver members, but it will mean they’ll notice a small drop in their take-home pay as a consequence.

If you don’t think you’ll be able to manage making the extra payments, you will be able to apply to remain at the lower 3% contribution level for 12 months.

However, you’ll need to apply annually to stick at 3%, and you’ll only receive a 3% employer contribution, too. So, if you can, it’s probably better to accept the contribution increases as they kick in … or you could opt to contribute even more of your salary to your KiwiSaver: 4%, 6%, 8% or 10%.

Reducing the age requirement for KiwiSaver contributions

Currently, 16- and 17-year-olds can join KiwiSaver only by applying with the support of a parent or guardian directly to a KiwiSaver provider. And while they can make payments, they don’t receive any government or employer contributions.

This is set to change. From next July, 16- and 17-year-olds will be eligible for the annual government contribution of $260.72. And from April 2026, they’ll receive employer contributions, too.

KiwiSaver changes: the upshot

As a way to encourage Kiwis to save for retirement, or to fund first homes, KiwiSaver is a great tool and making extra contributions should be encouraged.

However, while the new changes will increase savings rates, they do come at a cost, mainly to employers.

But as Australia’s compulsory employer contribution rate is 11.5%, as a nation, we’re still a long way behind our trans-Tasman friends when it comes to saving for comfortable retirement lifestyles.

Top KiwiSaver Growth Funds By 5-Year Returns

If you’re interested in making the most of KiwiSaver and comparing funds, the comparison table below displays some of the products currently available on Canstar’s database for a KiwiSaver member with a balance of $20,000 in a Growth fund, sorted by past 5-year return (highest to lowest), followed by company name (alphabetical) – some may have links to providers’ websites. Use Canstar’s KiwiSaver comparison selector to view a wider range of KiwiSaver funds. Canstar may earn a fee for referrals.

To read more about our latest KiwiSaver Awards click this link or to compare KiwiSaver providers, click on the button below.

Compare KiwiSaver providers for free with Canstar!

About the author of this page

Bruce Pitchers is Canstar NZ’s Content Manager. An experienced finance reporter, he has three decades’ experience as a journalist and has worked for major media companies in Australia, the UK and NZ, including ACP, Are Media, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ. As a freelancer, he has worked for The Australian Financial Review, the NZ Financial Markets Authority and major banks and investment companies on both sides of the Tasman.
In his role at Canstar, he has been a regular commentator in the NZ media, including on the Driven, Stuff and One Roof websites, the NZ Herald, Radio NZ, and Newstalk ZB.
Away from Canstar, Bruce creates puzzles for magazines and newspapers, including Woman’s Day and New Idea. He is also the co-author of the murder-mystery book 5 Minute Murder.