Understanding KiwiSaver

KiwiSaver is a government savings scheme available to all New Zealand citizens and residents.

The scheme, which first started in 2007, is entirely voluntary and, even though most New Zealand citizens and permanent residents aged 18 or older are automatically enrolled in KiwiSaver when they start a new job, they can choose to opt out from two to eight weeks after beginning employment.

If you're working, you can contribute 2%, 4% or 8% of your gross wage or salary to KiwiSaver. You are also entitled to a compulsory employer contribution of 2% of your gross salary.

Upon joining the scheme, you will receive a government contributed kick-start of $1000, which you cannot touch until the age of eligibility for NZ Superannuation (i.e. until you’re 65 years old), or after five years, if you’re aged between 60 and 64 at the time when you join.

How do I join KiwiSaver?

When you begin employment, you will receive information about KiwiSaver from your employer, and your KiwiSaver contributions will come straight out of your pay.

You can also choose to join KiwiSaver through one of its providers (these include banks, insurance companies, etc) if you don’t get enrolled automatically or through your employer.

Along with the regular contributions from your employer, the government will pay you an annual member tax credit. Some people may also be eligible for help with the deposit on their first home through their KiwiSaver earnings.

If you are automatically enrolled, you can ‘opt out’ if you wish, so long as you do it within the first eight weeks of employment. You can choose to ‘opt in’ at any time.

Do I need to join KiwiSaver?

This is ultimately a personal decision that you will need to make, based on your circumstances and what your future expectations are.

NZ Superannuation provides for a basic standard of living in retirement, but it may not be enough for the kind of retirement you want. A scheme like KiwiSaver doesn't affect your eligibility for NZ Superannuation or reduce the amount for which you would be eligible.

KiwiSaver schemes are managed by private sector companies called KiwiSaver providers. You can choose which KiwiSaver provider to invest your money with. However, please note that KiwiSaver is not guaranteed by the government. This means you make your investment choices in a KiwiSaver scheme at your own risk.

For more information, visit the KiwiSaver website.