This article was published on 7 April 2009. Some information may be out of date.

KiwiSaver change should please many + book giveaway

The most significant of the April 1 KiwiSaver changes is the lowering of the minimum employee contribution from 4 per cent of gross pay to 2 per cent.

The change affects three groups of employees:

  • Those reluctant to tie up 4 per cent of their pay until they buy their first home or reach NZ Super age. Halving the amount makes a big difference.
  • Those who feel they can’t afford KiwiSaver. Two per cent of $30,000 is less than $12 a week, and at $50,000 it’s less than $20 a week. In many cases, this would be largely covered by recent tax cuts.

    Remember, too, that you are committed to paying 2 per cent for only 12 months. And you can stop even earlier if you strike financial hardship.

  • People already in KiwiSaver who are wondering whether to reduce their contributions from 4 to 2 per cent.

    The answer depends partly on how much you earn. If it’s less than $52,150, and you switch to 2 per cent, you will put in less than $1,043 a year. That means you won’t make the most of the KiwiSaver tax credit, which matches your contributions up to that level.

    By all means drop to 2 per cent if you are struggling to afford KiwiSaver, but try to top up your contributions to $1,043 by the end of June each year.

    The other issue — whatever your income level — is whether saving 2 per cent is enough to give you a comfortable retirement. If it might not be, you could cut KiwiSaver contributions but save another 2 per cent elsewhere. That will give you easier access to that money if you need it.


My new book, “The Complete KiwiSaver”, has just been published. It includes the April 1 changes and guidance on which fund to invest in, which provider to go with, and how to switch provider. The publisher, Random House, has offered to give away ten copies to readers of this column.

To be in the draw to win a book, please answer the following short survey. Winners will be drawn at random — so simple answers are fine.

Email your numbered answers (no need to write out the questions) to [email protected], with “Giveaway” as the subject, by Friday April 17, 2009.

  1. Which age group are you in: 0–17, 18–40, 41–64, or 65+?
  2. What town or city do you live in or near?
  3. Have you already bought your first home? Yes or no
  4. Are you in KiwiSaver? Yes or no

If you answered “No” to 4, please answer questions 5 to 7

  1. Why aren’t you in KiwiSaver? (One or more reasons, up to 40 words)
  2. Is there anything you don’t understand about KiwiSaver? (up to 40 words)
  3. What changes would make you more likely to join? (up to 40 words)

If you answered “Yes” to 4, please answer questions 8 to 10

  1. What do you like most about KiwiSaver? (up to 40 words)
  2. What do you dislike about it? (up to 40 words)
  3. What KiwiSaver changes would you like to see? (up to 40 words)

Please add your home address so we can mail you a book if you win. We will publish your name and town or city, along with some findings from the survey, in this column four weeks from now.

No paywalls or ads — just generous people like you. All Kiwis deserve accurate, unbiased financial guidance. So let’s keep it free. Can you help? Every bit makes a difference.

Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it.