KiwiSaver’s Changing —Let’s Talk About It

In this episode of the Property Apprentice Podcast, host Debbie Roberts, financial adviser and owner of Property Apprentice, breaks down the latest KiwiSaver changes announced in the government’s May 22nd, 2025 Budget. Whether listeners are saving for their first home, planning for retirement, or simply trying to make sense of the updates, this episode delivers clear and practical insights.

Here’s what’s covered:

• 16- and 17-year-olds will now receive employer and government contributions to their KiwiSaver accounts
• The default employee and employer contribution rate will increase from 3% to 3.5% in 2026, and to 4% by 2028
• The annual government KiwiSaver top-up will be halved from $521 to $260.72 as of July 1, 2025
• Individuals earning over $180,000 will no longer receive any government contributions
• What these changes mean for savers and how they could affect long-term balances
• Why this is a great time to help teens start contributing to KiwiSaver
• Tips on how to make the most of what's still available

Debbie encourages listeners to check out the updated KiwiSaver Calculator at www.sorted.org.nz to assess how the changes might impact their savings goals.

Whether it's good news for young savers or a wake-up call for high earners, Debbie offers a balanced take on what the new rules mean for Kiwis — and how to adapt.

🔔 Subscribe, leave a review, and share this episode with anyone who has a KiwiSaver account or is thinking of starting one.

#KiwiSaver #NZBudget2025 #PropertyApprentice #FinancialAdviceNZ #FirstHomeBuyer #RetirementPlanning #DebbieRoberts #SortedNZ #FinancialLiteracyNZ

Transcript

Welcome back to the Property Apprentice Podcast. I’m your host, Debbie Roberts, financial adviser at Property Apprentice—and today, I’ve got some big KiwiSaver updates from the Government’s latest Budget announcement. So, whether you're saving for your first home, planning for retirement, or just trying to wrap your head around the latest policy shift—this episode is for you.

Alright. Let’s dive in. 

As of May 22nd, 2025, the Government has announced some very significant changes to KiwiSaver. Now, before you panic—don’t worry. I’m going to break this down and help you figure out what this actually means for you.

Let’s start with some good news. Under the new rules, 16- and 17-year-olds who are working will now receive employer matching contributions and Government contributions into their KiwiSaver accounts. That means teens can start building up their savings much earlier a huge win if you ask me. Compound interest loves time, and these young savers are now getting a head start on building a deposit for their first home or a retirement nest egg. If only I could go back and tell my 16-year-old self to start investing earlier.

Now let’s talk about contribution rates. Currently, the default employee and employer contribution rate is 3%. Under the new rules, that default rate will rise to 3.5% on April 1, 2026, and then to 4% by April 1, 2028. The Government says this will help grow KiwiSaver balances faster and reduce long-term financial stress in retirement. It makes sense. A higher contribution means a bigger balance down the line. But it’s not mandatory. Employees will still have the option to opt back down to 3% if the higher rate just isn’t doable. Even better, if you do opt down, your employer still matches that 3%. After 12 months, your rate resets to the default, but you can opt down again. So, yes, it’s a little bit of a merry-go-round, but at least it keeps things flexible.

Now, here comes the bit your wallet might not be thrilled about. Starting July 1 this year, the annual Government contribution to KiwiSaver is being halved from $521 to $260.72. And for those earning over $180,000 in taxable income, that Government contribution is being removed completely. The Finance Minister, Nicola Willis, says this is all about sustainability and reducing the cost burden on taxpayers. The Government is expecting to save around $3 billion over the next four years as a result of these changes. On the one hand, sure—that’s fiscally responsible. On the other, if you’re someone who relies on that annual top-up from the Government, this will feel like a step backward.

So what does this all mean for you if you're a first home buyer or planning for retirement? While cutting the Government contribution might be disappointing for you, increasing the default contribution rate to 4% will help your balance grow faster—especially with your employer match that level of 4% contributions. If you’re still eligible for the Government contribution, you’ll need to contribute at least $1,042.86 a year, that’s just over $20 a week, to get the full $260.72. It might not be as much as before, but free money is still free money.

Looking at the bigger picture, it’s a blend of wins and losses. On one hand, we’re getting younger people into the system earlier, and employees contributing more will see their balances grow faster. On the other hand, the reduction and removal of Government contributions might feel a bit harsh, especially for those already on tight budgets, but seriously, anyone earning over $180,000 earns more than enough to sort out their own retirement - they shouldn’t need the government contribution. I think it’s going to be much better served using that to contribute to the KiwiSaver Funds of 16 & 17 year olds instead. For most Kiwis—especially younger workers and average income earner, this is still likely to be a net positive in the long run. And for parents out there, this might be the perfect time to encourage your teens to get that part-time job and start contributing to KiwiSaver! 

And hey, if you’re unsure how these changes might affect your financial position by the time you reach the age of 65, check with your KiwiSaver Adviser, or have a look at the KiwiSaver calculator on the Sorted website. That’s sorted.org.nz. They’ve already updated the calculator to reflect these changes.

Thanks so much for tuning in to this week’s episode of the Property Apprentice Podcast. Don’t forget to subscribe, leave us a review, and share this episode with anyone in your life who’s got a KiwiSaver account, or is about to start one. See you in the next episode!