Changes to KiwiSaver announced by Government
The Government has announced a raft of changes to the KiwiSaver scheme, effective from 1 July 2025.
Default contribution rates increasing. The default KiwiSaver employee and employer contribution rate will be moving from 3% of salary and wages to 3.5% on 1 April 2026, then to 4% on 1 April 2028. Employees will be able to opt to contribute at a lower 3% rate and have that lower rate matched by their employer. Contributions will be reset to the default rate after 12 months, but employees can choose to reselect the lower rate again.
Government contribution has been halved. Currently, for every $1 a KiwiSaver member contributes (up to a maximum of $1046.86) in a year, the Government puts in 50c. The government contribution rate will be halved to 25c for every $1 contributed, up to a maximum of $260.72 annually.
High income earners no longer qualify for Government contribution. The Government contribution will be removed for KiwiSaver members with a taxable income over $180,000 per annum.
KiwiSaver eligibility extended to 16- and 17-year-olds. The Government contribution and employer matching will be extended to 16- and 17-year-olds in the workforce.
The Financial Services Council (FSC) has come out in support of the changes to increase the default contribution rate, and extend contributions to 16- and 17-year-olds. However, they have cautioned that the Government’s decision to reduce its contribution could disincentivise participation in the scheme, particularly for the self-employed. With 40% of members not actively contributing (for example, those on contributions holidays or people in irregular work), halving the government contribution makes it even less appealing for these members to start investing in KiwiSaver again.
Kiwimonster is evolving with KiwiSaver
We’re updating our tools to reflect the new KiwiSaver rules—including contribution increases and reduced government top-ups—so you can continue to deliver great advice, confidently.
While the new rules aim to increase participation, they don’t do enough to support the 40% of KiwiSaver members who aren’t actively contributing. That’s where Kiwimonster can help.
Even for those not currently contributing, Kiwimonster enables advisers to project future retirement outcomes. For example:
Self-employed clients – whether or not they’re making regular contributions.
People on a break – such as those on parental leave or overseas on their OE.
Using existing balances, advisers can still create meaningful forecasts—giving clients clarity, even if they’re pressing pause on contributions.
If you would like to find out how, give us a call.
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