Ups and downs for KiwiSaver as Government tweaks the rules

It was well signalled that Budget 2025 would include some changes for KiwiSaver. While the overall impact of the changes should be increased KiwiSaver balances, there are both ups and downs for individuals.  

The changes announced are summarised as follows: 

Employee and employer contributions

The current default contribution rate for employees and employers is 3%. There will be a phased increase of these rates to 4%.  

• From 1 April 2026 the default rate becomes 3.5% 
• From 1 April 2028 the default rate becomes 4%     

Employees who want to continue contributing at 3% will be able to apply to have the lower rate. The employer contribution would also stay at 3% in those instances. 

Government contribution

The Government contribution will be halved and become means tested with effect from 1 July 2025.  

Currently, the Government provides $0.50 for every dollar invested up to $1,043, resulting in a contribution of $521. This will halve to $0.25 for every dollar invested up to $1,043, resulting in a contribution of $261.  

The Government contribution will also become means tested, meaning it won’t apply to anyone earning over $180,000 (based on filed tax returns).  

Age of eligibility

Currently, any New Zealander can be part of KiwiSaver, but only those aged 18 and above can obtain the Government contribution and have mandatory employer contributions.

This age will reduce to 16, with the aim of getting younger people into saving sooner. The age of auto-enrolment will remain at 18.