Changes to KiwiSaver – Keep Calm and Carry On

Old Heads on Young Shoulders

We were surprised but impressed with the benefits of the KiwiSaver scheme being extended to younger people (16 & 17yr old’s). Through our work we often meet with people that are advanced in their working life and they comment that they are glad they were pushed into saving and never since missed the money pay to pay.

Whereas younger people sometimes focus on the loss of the KiwiSaver contribution from their wages as for them retirement (or even first house purchase) seems so far away.

Going forward, from 1st July 2025, the ‘govt contribution’ will apply to those 16yrs and older, where previously the govt matching had only been for those aged 18+ (and ceasing at age 65yrs). From 1 July 2026, the employer will be required to contribute to those aged 16+ also. Hopefully this helps encourage those younger people to create a savings habit through KiwiSaver, and gives them extra reward for doing so.

This makes the scheme even better for those that enter the workforce at an early age (16yrs) as they will be able to get the same benefits as their slightly older peers, and this will significantly assist them with first home purchase.

Like a Pay Rise

Our default contribution rates to KiwiSaver are going up to 3.5% in 2026 and then 4% in 2028, and these need to be matched by the employer. Sort of like a pay rise which you don’t have to negotiate. This change will also get us slightly closer to the Australian Super Scheme to which KiwiSaver is sometimes compared.

We expect that for most employees these changes will occur automatically and that will benefit most people – BUT the government has indicated you could retain the 3% minimum contribution if you prefer, this will likely require you to complete a KiwiSaver request form (though this is yet to be released).

Less Cream

In 2007, when KiwiSaver started, we were eligible for ‘matching tax credit’ of upto $1043/yr, AND a $1,000 kickstart. This was cream, with a cherry on top . In 2012 the matching tax credit was renamed the ‘govt contribution’ and reduced to $521/yr (so less cream), and soon there will be less cream again, but it’s still good to get SOME cream!!

We highlight though, there is NO change to the govt contribution for this year – so still aim to have at least contributed $1043 prior to 30 Jun 2025.

After this time, the govt contribution is going to 25% – effective 1 July 2025 (up to $260.72). So you still need to contribute at least $1043 to get this (now lower) level of govt contribution (or cream).

Also note, those with a taxable income of more than $180,000 will no longer be eligible for the govt contribution at all, so unfortunately, you need to get your own cream.
For those interested in more detail or other aspects of the budget, please follow this link to the official site