The Government has announced some changes to KiwiSaver as part of Budget 2025. These include reducing the government contribution, increasing default contribution rates, and expanding eligibility to younger members.
Here’s a quick summary of what’s changing – and what it might mean for you.
Changes to the government contribution
From 1 July 2025, the Government will reduce its KiwiSaver contribution for eligible members — from 50 cents to 25 cents for every $1 you contribute, up to a new maximum of $260.72 per year. To receive the full amount, you’ll still need to contribute at least $1,042.86 annually.
If you earn more than $180,000 a year, you’ll no longer be eligible for the government contribution from 1 July 2025.
Good news: This year’s contribution is not affected. If you're eligible, you can still receive up to $521.43 if you contribute $1042.86 before 30 June 2025, so it's worth topping up if you can.
Contribution Rates
From April 2026, the default KiwiSaver contribution rates will start to increase:
• To 3.5% from 1 April 2026
• To 4% from 1 April 2028
Clients who prefer to stay at the current 3% rate will be able to apply to Inland Revenue for a temporary exemption (for up to 12 months, with the option to reapply each year).
Younger savers included
From 1 July 2025, 16- and 17-year-olds who are contributing to KiwiSaver will be eligible for both employer and government contributions – a great opportunity to start building their savings early.
First home & retirement withdrawals
There are no changes to the rules for using your KiwiSaver to buy a first home or to retirement withdrawals. However, with higher contribution rates, your KiwiSaver account balance may grow faster – giving you more when the time comes to buy your first home or when you come to retirement.
Our view
The Government signalled that changes were coming, and we understand the aim to manage the country’s finances responsibly. Increasing contribution rates is a positive step — but more is needed to help Kiwis retire with confidence.
Research shows a couple retiring in a city might need $120,000 to $1.2 million saved. The average KiwiSaver balance for those aged 61–65? Just $69,000.
We think it’s time for a clear, long-term plan for KiwiSaver — one that gives you certainty and helps you build a nest egg helps you achieve your retirement ambitions.
Our focus remains on helping New Zealanders build a financially secure retirement – and we will continue to work with our clients, Government and industry to do that successfully.
Talk to us
If you have any questions about your KiwiSaver account and what these changes might mean for you, please get in touch with our friendly team – we’re here to help.
Other useful information - read our recent article "What kind of retirement do you want?"
