What KiwiSaver updates mean for you

The Government recently announced several important updates to KiwiSaver as part of Budget 2025. Whether you’re already contributing regularly or just starting your savings journey, now’s a great time to learn how the new rules could help grow your balance.

There are three key changes to be aware of.

Minimum contribution rates for both employers and employees will gradually increase from 3% to 4%. The first increase to 3.5% will start on 1 April 2026, followed by a rise to 4% on 1 April 2028.

A higher contribution rate means more money going to savings – but it also means higher compounding returns over time, making your KiwiSaver balance even bigger. 

Retirement Commissioner Jane Wrightson says, “Our findings show that the increase of the default employee and employer contribution settings could result in retirement funds lasting on average approximately 30% longer than under the pre-Budget 2025 settings for median salary and wage earners who contribute without interruption over a 40-year working life.”

You can read the full article on the Retirement Commission website.

If you earn $180,000 or under annually, the Government’s maximum contribution will reduce from $521.43 to $260.72. Remember, you’ll still need to contribute at least $1,042.82 per year to receive it.

If you earn over $180,000 annually, you’ll no longer be eligible for the Government contribution. You might like to consider contributing an extra $260.72 each year yourself, so that you still get an equivalent boost to your savings.

Good news for young people: from 1 July 2025, 16- and 17-year-olds will be eligible for the Government contribution. From 1 April 2026, they’ll also qualify for employer contributions. The new rule is designed to help younger Kiwis build strong savings habits early in life – and it could make a real difference to the size of their first home withdrawal amount or nest egg after age 65, as early investments have more time to grow through compounding returns.

By helping to grow your KiwiSaver balance faster over the long term, these latest updates could mean you have more savings to fund your retirement or first home purchase. If you want to see if you’re on the right path, or how the changes could impact you, check out our easy-to-use online calculator.