The Government has announced a series of significant updates to KiwiSaver that will affect how much you save, how much your employer contributes, and how much support you receive from the Government.
Here is a summary of the important changes that may affect you.
Contribution rates
The default contribution rate for both employees and employers will rise:
- From 3% to 3.5% on 1 April 2026
- Then to 4% on 1 April 2028
What it means for you:
If you are on the default rate, your total contributions will increase from 1 April 2026, unless you choose to opt down.
Opt-down option:
- You can choose to opt-down by applying for a temporary exemption to stay on the current 3% rate. Exemptions are for 12 months, with the option to reapply each year
- If approved, your employer will match at 3%, not the higher rate
- This opt-down is not permanent, however the Government has not specified an end date —it is designed to give people time to adjust
Government contribution halved or cut entirely
Changes to the Government contribution, or Member Tax Credit (MTC), came into effect on 1 July 2025. The changes are:
- Reducing the MTC from 50 cents per dollar to 25 cents per dollar;
- This will lower the maximum annual government contribution from $521.43 to $260.72;
- Introduction of a means test if you earn over $180,000.
What this means for you:
- If you currently contribute at least $1,042.86 per year, you will be eligible to receive the full $521.43 MTC from the Government for the period ending 30 June 2025;
- From 1 July 2025, you will still need to contribute at least $1,042.86 each year to receive the revised maximum amount of $260.72;
- If you earn more than $180,000 you will no longer receive the Government contribution.
A boost for young workers
The new changes mean that 16 and 17 year-olds who are contributing to KiwiSaver will be eligible to receive Government contributions from 1 July 2025. From 1 April 2026, they will also be eligible to receive employer contributions.
Our view
Our priority is to ensure you receive the support and guidance necessary to navigate these updates effectively. We are committed to helping you make informed decisions tailored to your financial goals and needs.
If you would like to discuss how these changes will affect your KiwiSaver and personal circumstances, please feel free to contact us.
30 June 2025