Does enroling kids in KiwiSaver still make sense — Fisher Funds

Like you, we were surprised at the Government's decision to discontinue the $1,000 kick-start. It hadn't been signaled and we heard from a lot of people in the days after the Budget saying "darn, I was meaning to sign up, now I've missed out".

In our view, KiwiSaver still remains an attractive, viable and successful retirement savings solution. Yes, the $1,000 kick-start was a nice incentive, but the other benefits of KiwiSaver were always so much more important - like the long-term impact of your ongoing contributions, contributions from your employer and the Government contribution of $521 each and every year.

For kids though, the loss of the $1,000 kick-start makes a big difference. Prior to this law change, the main reason most parents signed their kids up to KiwiSaver was to take advantage of this free $1,000 from the Government.

We've always encouraged parents to get their children into the savings habit early and learn about investments. KiwiSaver was a great way to do this.

Our view now is that people should not sign children up to KiwiSaver.

Without the kick-start incentive, member tax credits or compulsory employer contributions, KiwiSaver no longer makes sense for kids. Here's why:

If you still want to start up an investment or savings plan for your kids, we can help you through our range of managed funds. You can set up a regular investment from as little as $50 per month or invest a lump sum from $500. If this is something you'd like to explore, please give our team a call and we'll talk you through the options.