Significant KiwiSaver changes are on the horizon, and now is a great time to review your fund and check whether your current settings still align with your long-term goals.
At The Wealth Supply Co, we often remind clients that consistent contributions and smart fund selection are the real power moves when it comes to growing your retirement savings – not chasing government incentives alone. Let’s break down the key changes and what they mean for you.
1 – Government Contributions Halved
WHAT’S CHANGING:
From 1 July 2025, the government’s annual top-up is being cut in half:
- From $521.43 to $260.72 max per year
- You still need to contribute at least $1,042.86 per year to qualify
WHAT THIS MEANS FOR YOU:
This might feel like a blow and may seem discouraging, but it’s worth putting into context. On an average NZ income of $97,500 – 3% employee + 3% government contributions adds up to $5,853 per year. The reduced government contribution is just 4.4% of that total.
The key takeaway? The government contribution is a bonus, not the foundation. Focus on what you can control:
👉 Consistent contributions
👉 Matching employer contributions
👉 Choosing the right fund
2 – Default Rate Increasing
WHAT’S CHANGING:
- The default contribution rate rises to 3.5% by April 2026
- Then increases again to 4% in April 2028
- You’ll still be able to opt back to 3% temporarily
WHAT THIS MEANS FOR YOU:
A small increase in your contributions now can make a big difference down the line thanks to compound growth. If you’re unsure about whether to increase your rate – have a chat with Johan, he can help go through the calculations. You might be surprised by how much extra even 1-2% can add up over 10-20 years.
3 – KiwiSaver Opens to 16-17 Year Olds
WHAT’S CHANGING:
From mid-2025, 16-17 year olds will be eligible for:
- Government contributions (from July 2025)
- Employer contributions (from April 2026)
WHAT THIS MEANS FOR YOUR KIDS:
This is a fantastic opportunity for young people to start early. Even small weekly contributions can snowball into something meaningful by the time they’re ready to buy a home.
I’ve got three kids under 7, and I’m already thinking ahead. A few dollars a week into KiwiSaver could mean a $30,000+ head start for their future.
Bonus: The funds are locked away – so there is no temptation to spend it at 18. Instead, they’ll be learning valuable saving habits and building a solid foundation for adulthood.
4 – No Government Contribution for High Earners
WHAT’S CHANGING:
From July 2025, if you earn over $180,000, you’ll no longer receive the government contribution.
WHAT THIS MEANS FOR YOU:
The impact is likely minimal, as most of the value for high-income earners lies in:
- Employer contributions
- Smart fund growth
- Tax-efficient long-term savings
Now is a great time to review your settings and make sure your fund matches your growth goals.
Want to see the full details?
You can read the official documents here:
Some of these changes may feel like a setback, but they’re a good reminder that your retirement success depends more on your choices than government contributions
✅ Set your contribution level
✅ Choose the right fund for your goals
✅ Start early (or help your kids do the same)
Need help reviewing your KiwiSaver? We’d love to chat and make sure you’re on track – Get in touch with Johan our KiwiSaver Adviser today!
