Understanding the latest KiwiSaver changes

As part of the 2025 Budget, the New Zealand Government introduced a number of changes to KiwiSaver, designed to enhance long-term sustainability.

In this blog, with commentary from Nikko Asset Management Head of Distribution, Sam Bryden, we break down the key changes, outline who will be affected, and highlight what steps you can take to stay on track with your KiwiSaver goals.

What has changed?

The KiwiSaver changes announced in this year’s Budget include adjustments to government contributions and eligibility criteria, and a roadmap for future employer and employee contribution increases.

We’ve summarised the key changes for you:

• The government’s annual contribution has been halved, with a new maximum government contribution of $260.72.
• KiwiSaver members who earn more than $180,000 annually are no longer eligible for the government contribution.
• KiwiSaver members aged 16 and 17 are now eligible to receive government contributions and starting 1 April 2026, will become eligible for employer contributions.
• The default employee and employer contribution rates will see a gradual increase: 3% to 3.5% from 1 April 2026, then to 4% from 1 April 2028.
• KiwiSaver members will be able to apply to Inland Revenue for a temporary rate reduction to remain on 3% for up to 12 months from 1 February 2026.
  

Learn more about the changes to KiwiSaver

Why does it matter?

According to Nikko Asset Management Head of Distribution, Sam Bryden, these changes are the most substantial shift in KiwiSaver policy in over a decade, meaning it’s a good time to reassess goals and ensure your fund choice aligns with your retirement timeline.

“The aim is to help more Kiwis retire with greater financial security, especially as life expectancy and cost of living are continuing to rise.

“With higher contribution rates, members may accumulate more over time, but reduced government support means people need to be more proactive in managing their savings strategy.”

What might this look like for you?

For younger members, qualifying for government contributions will help kickstart savings early, whilst higher-income earners will need to rely entirely on their own and their employer’s contributions to grow their retirement savings.

Low-income earners may feel the pinch from reduced government contributions, while young professionals (yo-pros) and those nearing retirement will need to weigh the impact of increased contributions against their current financial commitments.

Sam’s thoughts for someone reviewing their KiwiSaver plan today 

“It’s important to take a moment to look at your contribution rate, your fund type, and your long-term goals. Even small changes like bumping your contribution up by 1% can have a big impact in the long run.

“If you are unsure, reach out to your provider or adviser, they can help you to explore different ways to offset the reduced government contribution and support long-term growth.

“KiwiSaver is still one of the best tools we have for retirement savings in NZ, and these changes are a good reminder to stay engaged with it.”