The long and short of it: For KiwiSaver members, policy is less important than proactivity

By Stuart Williams, Managing Director at Amova NZ

Originally published on The Post on October 1, 2026

KiwiSaver has come of age since the national retirement savings programme was established in 2007. Its 3.44 million members constitute around 64% of New Zealand’s population, funds under management have reached $138.8 billion and the average balance is over $40,000. With members aged 65 and over accounting for almost half of all withdrawals, KiwiSaver is now actively funding retirements, not just accumulating savings. The relevance of KiwiSaver, the size of the pot, and the election have made it ripe for new policy announcements, but nothing any party promises matters as much as the decisions each member makes for themselves.

Analysis: It is helpful that the election is putting a spotlight on KiwiSaver, with calculations being made for each party’s policy. Stuff put an eye-catching figure on the stakes, saying that “Kiwis face a potential $764,000 election choice” and modelling the financial difference in the scenarios posed by the policies of the two major parties; depending which KiwiSaver policy prevails, a young saver could end up around three-quarters of a million dollars better or worse off by retirement.

Your personal settings matter more than policy settings.

Everyone has different pressure points at different stages in their life. For a young person just coming out of university with 40-some years to run on their KiwiSaver, their thinking about savings will be interconnected with student loans and getting a career going. By their late 20s or 30s, they might be in a serious relationship and merging finances, which could involve buying a home and managing two KiwiSaver accounts. Then when people are raising children, they are starting to think as much about their kids’ long-term savings journey as their own (and some parties’ current policies propose starting KiwiSaver from birth). 

Your stage of life shapes your plan, but for every working-age KiwiSaver member, three decisions matter most. 

The first is your contribution rate. If you move from the current default employee contribution of 3.5% to 4% (or even higher if you can, going up to 6%, 8%, or 10% of your pay), and sustain this for decades, it compounds into six figures, aided by the requirement for your employer to contribute a minimum of 3.5% of your before-tax pay. 
 
The second decision is your fund type. A saver with 30 years to retirement who sits in a conservative fund could pay for security they don't need, and the cost (the money they’ve left on the table) shows up much later, when it is too late to fix it. 

The third decision is whether to hold the line when the world gets hectic. For example, KiwiSaver members who switched to cash in March 2020, when lockdowns began, and came back months later, turned an on-paper loss into a real one. This is a pattern in every downturn and every election cycle. If you are in the investment markets for your whole working life, anything that seems enormously consequential in the moment will be a blip in the cycle when viewed through a long lens. As a saver it is good to be proactive, but risky to overreact.

Central bank decisions are worthy of moderate attention.

The official cash rate rose 25 basis points to 2.75% on 2 September, and all eyes are on the upcoming review on 28 October. ANZ economists are picking a steady series of hikes to top out at 3.50% in March 2027. The positive in all this is that the sooner rates go up, the sooner they plateau, and everyone, including the markets, likes the certainty that brings.

The trick here is to keep an eye on what the Reserve Bank of New Zealand is doing, but don’t let its decisions steer your boat. 

On the upside, we do seem to be in a new era for RBNZ communications, and that can only be a good thing for investors, mortgage holders, and the markets. The central bank is being clear about the factors driving the OCR upward and demonstrating a more developed and expansive view of the world, all of which means Kiwis can make more informed decisions about what they do with their money.

Think beyond the financial.

We tend to think of buying our own home as a financial decision, but it isn’t the same as your KiwiSaver investment, which is purely financial in that it’s what you need to help fund the retirement you want. Owning a home is related but different; it meets the basic human need for shelter, and there is something intrinsically ‘good’ about owning the property you live in, ingrained in the Kiwi psyche for many, and not having to ask a landlord for permission to put a nail in the wall. I say this as a reminder of the bigger picture: take care of yourself, because your own decisions are more important than any Government or party policy or promise, no matter how shiny.

Stuart Williams is Managing Director and Country Head of Amova Asset Management New Zealand, the Auckland based investment manager established in 1994 and formerly known as Nikko AM New Zealand, which manages New Zealand equity, fixed income and cash assets for KiwiSaver members, charitable trusts, foundations, local government and institutional clients.

Disclaimer: This information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be relied on as financial advice. Before making any investment decision, you should seek professional advice suited to your personal circumstances. Past returns are no indication of future performance.