The government has announced several important changes to KiwiSaver, starting from July 2025 and rolling out through to 2028. These changes are designed to help New Zealanders boost their balances helping them save more towards their retirement and first home.
At Aurora Capital, we're here to guide you through what’s changing and what it could mean for your KiwiSaver account.
Contribution increases are coming
Both employee and employer contribution rates will increase over the next few years:
From 1 April 2026, the minimum rate will rise from 3% to 3.5%
From 1 April 2028, it will increase again to 4%
What this means for you: While employees will see slightly higher deductions from their pay, the increased contributions from both you and your employer will provide a valuable boost to your long-term savings. These changes are designed to help you grow your balance faster, meaning you have more for retirement or your first home.
With the contribution increase, a new flexibility feature will be introduced. You’ll have the option to temporarily reduce your contribution rate to 3% for up to 12 months at a time. During this period, your employer can also match your reduced rate.
Government contributions are changing
Starting from 1 July 2025, two key updates will affect how government contributions work:
The matching rate will drop from 50 cents to 25 cents for every dollar contributed, up to a maximum of $260.72 per year
If you earn more than $180,000 per year, you will no longer be eligible for the government contribution
What this means for you: If you earn under $180,000, live mostly in New Zealand and meet the eligibility criteria, contributing at least $1,042.83 each year will still qualify you for the full government contribution of $260.72. This remains a valuable way to boost your retirement savings.
Support extended to younger members
Changes are also being introduced to include younger savers:
From 1 April 2026, 16 and 17-year-olds will be eligible to receive employer contributions, if they are contributing
From 1 July 2025, they will also qualify for the government contribution
Note: Auto-enrolment will still begin at age 18. These changes apply to teens who have actively joined KiwiSaver and are making contributions.
What this means for you (or your teen): This is a great opportunity to help young people start building good financial habits. Even small contributions at this age can grow significantly over time.
We’re here to help
At Aurora Capital, we are keeping a close eye on these updates and what they mean for our members. Whether you want to adjust your contributions, review your fund settings, or set up KiwiSaver for a younger family member, our team is here to support you.
DISCLAIMER
This information is provided in a general nature only and should not be construed as or relied on as financial advice. This is not a recommendation to invest in a particular financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any investment decisions.