The Government has announced a number of changes to the KiwiSaver Scheme as part of Budget 2025 on 25 May 2025. There are quite and few changes and it is likely to affect members differently depending on their circumstances.
Key KiwiSaver Changes Announced
✅ 1 July 2025: Cut in Government contributions
- From 1 July 2025, the Government contribution rate will reduce to 25 cents for every $1 contributed by members, up to a maximum of $260.72. This is half the current rate.
- Members whose annual income is over $180,000 will no longer be eligible for Government contributions.
NB: Members contribution for the year to March 2025 remains unchanged and will be paid as usual in July/August 2025.
✅ 1 July 2025: Age eligibility criteria for Government Contribution
- From 1 July 2025, working 16- and 17-year-olds will be eligible for employer and government contributions.
✅ 1 April 2026 to 1 April 2028: Increase in employer and employee contribution rates
- The default employee and employer matching contribution rates will increase from 3% to 4%, phased in over three years:
- From 1 April 2026, the rate will increase to 3.5%.
- From 1 April 2028, the rate will increase to 4%
NB: Employees can opt to stay at the lower 3% rate, but it will reset automatically to the default every 12 months. They can opt down again if needed.
What does this mean for you?
- If you contribute at the higher default rates, your KiwiSaver balance can grow faster, with your employer also matching the increased contributions. This helps build a larger first-home deposit or retirement fund.
- You have the option to opt down to the 3% rate if higher contributions aren’t affordable now or in the future. The automatic reset after 12 months acts as a helpful prompt to reassess your situation, ensuring you’re not stuck on a lower rate if your circumstances improve.
- With the employer and government contributions extended to 16 and 17-year-olds, younger workers get a valuable head start.
- While the Government contribution is being reduced, the increased employer matching at higher rates can offset this over time for those who don’t opt down to 3%.
What should you do?
- Now is the perfect time to check whether your current KiwiSaver fund and contribution strategy are still working for you.
- It’s also a good time to review your finances and determine whether you’re in a good position to increase your contributions next year.
Not sure where to start?
Take our free KiwiSaver HealthCheck — it’s quick, secure, and tailored to help you make smart, confident decisions.
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