|Objective:||KiwiSaver is a savings and investment initiative designed to help create a sustainable retirement plan.|
|For Who:||All New Zealand residents of any age are eligible for KiwiSaver sign up, regardless if they work or not.|
|Contributions:||Employee: 3%, 4%, 6%, 8%, or 10% of salary. Employer: Minimum 3% of salary. Government: 50 cents on every dollar up to $521.43/yearly.|
Getting into KiwiSaver may feel a bit confusing, and you may not know what questions to ask. But here at National Capital we believe in giving more power to the client. We will go over the most important information you need to know as someone new to KiwiSaver or an existing KiwiSaver investor that wants to know more.
National Capital is specialised in KiwiSaver and Investment research. We have listed all the KiwiSaver funds on this page. There are different considerations when choosing a KiwiSaver fund for someone planning to use their KiwiSaver savings for retirement as compared to someone who is looking to use them for a First Home purchase. If you are planning to use KiwiSaver for retirement, you need to take into consideration your retirement income goals, the lump sum you need at retirement and your current balance and rate of savings in KiwiSaver. You will also need to take into consideration your capacity and tolerance for volatility.
We have tried to answer the question of “How does this KiwiSaver fund compare to others?”. Click on the name of your current KiwiSaver fund below to see how it compares against other funds in the market and get an indication if it is the appropriate fund for you.
However, please note that the information on the pages linked from here is not personalised financial advice. If you want advice based on your own circumstances and goals, please start by submitting the KiwiSaver HealthCheck on our website. National Capital was founded in 2018 and now advises Kiwis on over $50 million of their KiwiSaver savings. We are based in Auckland, but serve clients all over New Zealand. We provide free KiwiSaver advice, with the goal of empowering one million kiwis to become financially secure.
Whether you're thinking of joining KiwiSaver for the first time or already in a KiwiSaver scheme, here are some quicklinks to the most common KiwiSaver queries:
Our core function is KiwiSaver research. Therefore, whether you're a long-time investor or just thinking of joining KiwiSaver, you can benefit from our specialised KiwiSaver insight. It only takes a few minutes to enter your detail and get your KiwiSaver recommendations. We've helped Kiwis from all walks of life make decisions tailored to their goals and circumstances. From self employed to people looking to switch from their default KiwiSaver scheme.
We are a financial advice company specialised in KiwiSaver investment research. And guess what? We provide FREE KiwiSaver advice with the goal to empower Kiwis to take ownership of their financial security and freedom. We currently have a KiwiSaver Scheme list of 14 providers which we work with and recommend based on your circumstances.
Are you ready for National Capital to check the health of your KiwiSaver investment?
1. KiwiSaver HealthCheck / 2. Personalised Recommendations / 3. Decision
A combination of professional financial advisers and the latest technology deliver tailored recommendations, at no cost to you! Follow our 3 simple steps.
It should take you only 10 to 15 minutes to complete the KiwiSaver Healthcheck. This gives us what we need to compare your current situation with opportunities to maximise your investment.
Our thorough analysis delivers tailored recommendations suited for you. Based on your goals, you will get recommendations on the most appropriate fund and KiwiSaver Scheme.
Our services allow you to make an informed decision amongst all the KiwiSaver choices available. You can ask questions, decide to proceed with our recommendations, or stick to your current situation.
Should you wish to apply our KiwiSaver recommendations, National Capital makes the switch a completely hassle-free experience.
KiwiSaver is a voluntary investment and savings scheme. It was set up by the New Zealand government to help Kiwis save for buying their first home or retirement. Its features include a nationwide auto-enrolment by setting up KiwiSaver when getting a first job. Employees are automatically enlisted into KiwiSaver sign up but have the choice to opt out if they don’t want to participate. A percentage of your salary is deposited into your KiwiSaver, as well as a contribution from your employer. By choosing to stay in a KiwiSaver scheme, your employers are obligated to contribute a minimum of 3% of your salary to your KiwiSaver. The contributions you make range from 3, 4, 6, 8, or 10% and it is 100% your choice. The government also offers capped annual contributions. Joining KiwiSaver prior to 2015 meant that the government deposited a $1000 lump sum into your KiwiSaver. Although they no longer offer this, the government will contribute 50 cents to every dollar you deposit. This government contribution is capped at a maximum of $521.43 per year.
When joining KiwiSaver, you’re able to choose your preferred KiwiSaver scheme and fund type. If you’re not sure, you’ll automatically be enlisted in a default scheme but you can always change later. Many people come to National Capital long after KiwiSaver sign up to check if they’re in the right scheme.
Your KiwiSaver investment can be accessed for retirement, your first home deposit, or other uncommon circumstances. KiwiSaver is predominantly seen as a long-term investment to ensure a comfortable lifestyle beyond retirement. In the event that you are emigrating out of New Zealand, you may be eligible to withdraw your KiwiSaver investment. However, strict guidelines and criteria are in place to minimise cases of early withdrawals.
KiwiSaver was introduced in 2007, as a way for Kiwis to save enough money towards either their first home or retirement. Before the introduction of KiwiSaver, Kiwis needed to rely on a weekly $437 NZ superannuation payment once they reached the retirement age of 65, as well as whatever retirement savings they had set aside. Kiwis tend to spend more than what is provided from NZ superannuation as living expenses continue to increase. Thus, the KiwiSaver Scheme eases financial stresses that may occur in retirement.
More specifically, a trend had come to the government's attention, duly pointed out by Sir Michael Cullen. New Zealand had some of the lowest savings per household compared to other developed nations. Cullen also pointed out that an estimate was done on the savings rates per household and it was a negative 17.5%. In March 2007, four months before KiwiSaver became active, the NZ Treasury revealed the results of a study. It showed that around 20% of New Zealanders (between 45-64 years old) did not have enough for retirement. During that time, the study revealed that current retirees had their private savings and mortgage-free homes to sustain their retirement. The worry was around those who were younger that had large debt, a mortgage, student loans, and young children. Setting up KiwiSaver was a tool introduced to get more low and middle-income households investing for retirement.
Before Kiwisaver was introduced, there were retirement plans available but only around 600,000 people from the workforce were enrolled. In a survey done in 2001, less than 20% of people earning between $15k to $50K were enrolled in a retirement plan. This served as a big concern on which Sir Michael Cullen based his target audience when setting up KiwiSaver.
In August 2006, the law passed, giving KiwiSaver the go-ahead and the driving force behind this was Sir Michael Cullen. He was the Minister of Finance and was the great architect of not only KiwiSaver but of Working for Families. Sir Michael Cullen was born February 5th, 1945 in the town of Whakatane and led a three-decade political career. He served as the deputy prime minister to Helen Clark between 2002-2008 as well as the deputy leader of Labour. He retired in 2009 from Parliament but then went on to be involved in Treaty of Waitangi settlement negotiations. Moreover, chairing New Zealand Post, and the Earthquake Commission.
July 1st, 2007 marked the beginning of the KiwiSaver scheme officially. Two years in, just under 100,000 New Zealanders had enrolled by joining KiwiSaver. Major progress has been made since then and most if not all working Kiwis are aware of the scheme. Features like online applications have made the process easy to apply for KiwiSaver self employed, teenagers, and the entire workforce.
Unfortunately, in March 2020, Sir Michael announced that he had lung cancer and died in August 2021 at the age of 76. Prime Minister Jacinda Ardern gave a speech in his honour to which she said, “Sir Michael was one of the most influential figures in New Zealand politics over the last 40 years. Intelligent, funny, and kind, he left a significant legacy for the country.”
Most certainly, he is remembered for leading the way forward to the establishment of the KiwiSaver scheme among many achievements. Whether joining KiwiSaver self employed or through a company, Sir Michael Cullen wanted all Kiwis to be more financially secure. As of June 2021, more than 3 million people are active KiwiSaver investment members. An important milestone to be proud of.
Setting up KiwiSaver is intended to help you save for your future. KiwiSaver is for those looking for a simple way of investing their money that is actively managed by the KiwiSaver Scheme managers. Ultimately, setting New Zealanders up with enough savings to live comfortably once retired. It was created to fix the issue of many pensioners living in poverty. You may know that your KiwiSaver investment can be used to save for either your first home or for retirement. The best way to find out which KiwiSaver Scheme is best for you is by talking with your financial advisor or contacting us at National Capital here.
As per IRD, anyone who lives in NZ can join if they are an NZ or Australian citizen or resident. On the other hand, you cannot participate if you hold a temporary, student, or visitor visa. Furthermore, if you’re a citizen but just visiting NZ or are on holiday, you cannot join the KiwiSaver scheme.
For those under the age of 18, there are some rules around your KiwiSaver sign up and participation. Firstly, you can only join through a scheme provider and not through your employer. There are around 30 different KiwiSaver providers. For those who are 16 or 17 years old, they must have at least one legal guardian to sign their application. If not, they can contact the scheme provider about joining KiwiSaver. Anyone under the age of 16 must have all legal guardians sign the application as they cannot self-enrol without it. To find out if you are eligible for joining Kiwisaver, visit IRD’s website and take the eligibility quiz.
After meeting the set criteria, you can join KiwiSaver self employed or if you work for a company.
As mentioned prior, the five main types of KiwiSaver investment funds include Cash, Conservative, Balanced, Moderate & Growth. But recently there has been the addition of Aggressive or High Growth funds, which are slightly more volatile than the normal Growth Fund.
As the proportion of Growth assets increases and Cash assets decrease, the volatility of the fund increases. This means that as a KiwiSaver investor, you would need to hold high volatility funds for longer. This has to be taken into consideration when joining KiwiSaver and choosing a KiwiSaver scheme.
Only New Zealand citizens or residents entitled to live in New Zealand indefinitely have the possibility of joining KiwiSaver. If you are only residing temporarily, a visitor, on a work or student visa, you can not participate in KiwiSaver. If these conditions do not apply, you may be able to proceed with KiwiSaver sign up.
This is because the KiwiSaver scheme is intended for people with a long-term and post-retirement future in NZ. Naturally, someone who’s residing in New Zealand temporarily won’t truly benefit from a long-term KiwiSaver investment and savings scheme.
Although you must be a resident or NZ citizen to be eligible for setting up KiwiSaver, there are alternative options. Milford is a KiwiSaver scheme that also offers investment funds other than KiwiSaver. These investment funds generally run parallel to KiwiSaver investment schemes and have a similar return record. Therefore, as a non-resident or citizen, you have the option to invest in funds similar to joining KiwiSaver. The difference is that you can withdraw your investment from these funds at any time, unlike KiwiSaver.
Before joining KiwiSaver, you should consider the possibility of applying for New Zealand residency if eligible. Once you receive NZ residency, you can then apply for KiwiSaver sign up.
KiwiSaver is a long-term investment and savings plan. Therefore, setting up KiwiSaver young is a great idea. You do not need to be working in order to register. However, there are certain pathways you must follow.
If you are under 18 or joining KiwiSaver before starting work, you’ll need to join directly through a scheme provider. You cannot opt-in through your employer. Those under the age of 16 must have the consent of all their legal guardians to apply for KiwiSaver. You cannot enroll yourself.
Those between the ages of 16 and 17 need at least one guardian to co-sign their KiwiSaver sign up application. If you don’t have a legal guardian, contact your chosen KiwiSaver scheme provider for help.
Yes, you can join KiwiSaver self employed. Much like someone under 18 or not working, you can go through KiwiSaver sign up directly via a scheme provider. Joining KiwiSaver self employed means that you may pay contributions directly to the provider or through IRD.
You can join at any time by completing a KiwiSaver sign up form from your chosen provider. You can also change your contribution rate at any time by contacting your provider.
You won't get employer contributions investing in KiwiSaver self employed, as compared to when working for a company. However, you may still qualify for the annual government contribution.
Joining KiwiSaver self employed means you can choose a contribution rate that suits your situation and set payment intervals accordingly. You can set up an automatic payment through to your KiwiSaver scheme.
KiwiSaver is a voluntary savings scheme. That means that you can decide whether or not you want to be a part of it. While the decision rests with you, KiwiSaver sign up figures continue to rise year on year. That is because the benefits of KiwiSaver investment far outweigh any negatives.
If you don't want to join, when you are employed for the first time and your employer gives you the KS2 form, do not fill it in. If you are currently with KiwiSaver and want to opt-out, you can use Inland Revenue’s website to go through the steps required to opt-out. You can apply through myIR online as well.
If applicable, you also need your:
If you move overseas (apart from Australia) for more than 12 months, you can apply to withdraw your KiwiSaver funds after you’ve emigrated. If you have migrated overseas to a country other than Australia for at least a year, you can do two things.
You can choose to:
If you are not planning to move permanently overseas or are moving within New Zealand or Australia, you do not need to worry about transferring to another scheme. If you plan to permanently move to Australia, you can transfer your KiwiSaver account to the Australian superannuation scheme. But if you want to, you can stay with KiwiSaver indefinitely.
After you have been overseas for over a year, you can apply to withdraw most funds from your KiwiSaver scheme. Things like your savings, employee contributions, and interest earned can all be withdrawn. However, government contributions towards your KiwiSaver scheme cannot.
If you don’t want to make a definite decision, keeping your KiwiSaver investment within NZ can be a great option. Your savings are invested and your selected KiwiSaver scheme works to generate annual returns. If you ever decide on returning to NZ, you won’t have to worry about setting up KiwiSaver once again.
Before or after joining Kiwisaver, there are multiple ways to see which KiwiSaver provider is best for you. Here at National Capital, we provide a KiwiSaver HealthCheck to determine how financially tolerant you are and your capacity to save. National Capital’s HealthCheck takes into consideration your goals and how you react to changes within the market. Depending on whether you are buying your first home or retirement, talking with a financial advisor will allow you to make the best decision.
The only money which is taxed for KiwiSaver is the earnings gained from returns each year. This means that you aren’t paying out of pocket for the returns, and is taken off the amount made within the year from the KiwiSaver account. Any money which is withdrawn from your KiwiSaver account is tax-free
Depending on your KiwiSaver provider, your fees may vary. This includes annual management fees and fixed quarterly payments. Fees are based on your savings amount, and the services your fund provides. It is in your best interest to compare the fees with the returns when comparing funds. Although you may receive higher returns, it may be outweighed by the fees charged. Check with your KiwiSaver provider to see what you're paying if you aren’t sure.
No, setting up KiwiSaver, much like other investments is not guaranteed to give specific returns. However, we can look at long-term averages to get an indication of the range of expected returns from different types of funds.
These are the average returns per annum for the last decade for the major funds:
Outside of the contributions made by both you and your employer, you can also make additional voluntary contributions towards your KiwiSaver at any time. However, once you have made the payment, it is locked in until you’re eligible to withdraw your savings.
All KiwiSaver providers are required to release quarterly and annual reports on how their KiwiSaver schemes perform. The reports give details, including returns, investment mix, fees, and their top investments. Providers release these on their websites, or you can compare them with the Best Performing KiwiSaver Schemes here.
It is not unusual to feel uncomfortable with your current KiwiSaver provider, and doubt if it is the best KiwiSaver for your savings. There are plenty to choose from, and some that may align more with your views. By having a sit down with your financial advisor, they can have a look at which KiwiSaver scheme best fits your expectations and values. It is important to remember that by changing funds and or panic switching, you may lose some returns on your KiwiSaver account. You can change your KiwiSaver provider at any time, but you can only belong to one at a time.
As mentioned prior, National Capital’s KiwiSaver HealthCheck lets you see if your current provider is best for you, and recommends KiwiSaver schemes that fit your needs.
KiwiSaver is designed to be a long-term investment, with the current age being 65 to take out for retirement. But there are some ways to withdraw from this earlier on.
Financial hardships are situations that can unfortunately arise throughout everybody's life, and the IRD and KiwiSaver providers know that sometimes you need your savings earlier than expected.
The inland revenue department defines someone going through financial hardships as below:
If you are currently in a situation connected to one or more of these, you are eligible for withdrawal of KiwiSaver. You need to contact your KiwiSaver provider to complete a form to withdraw.
There are plenty of options for choosing your preferred retirement savings fund, whether that be actively investing or saving cash in the bank. KiwiSaver is just one of many methods, although it's the preferred fund for most New Zealanders. The KiwiSaver system allows you to easily save money throughout your working life and have it all ready by the time you retire.
However, it's up to you: there is no limitation on the number of investments you can have when you retire. We recommend seeing a financial adviser if you're organising your own investment accounts outside of KiwiSaver, as they can share expert advice on managing your money.
KiwiSaver investment, like any other investment, is no stranger to market volatility. This means that your money can go up or down in value. Therefore, the short answer is yes. You can lose money on a KiwiSaver scheme. When joining KiwiSaver, this is important to know so that you can make the right decisions when your KiwiSaver investment is in the red.
However, it is not as doom and gloom as it sounds. Companies in the main global markets, in general, go up and down in value all the time. Reasons can vary from news articles to bad ad campaigns, and global pandemics like Covid-19. No matter how tech-savvy the financial industry gets, it is impossible to predict and guarantee investments as totally risk-free. KiwiSaver schemes work full time in researching market trends and analyse companies to ensure they have a sustainable business model.
Additionally, professionals working in a KiwiSaver scheme invest your money in a way designed to spread the risk. Whether this is across different companies, industries, or markets. For example, looking closely at the breakdown of your KiwiSaver investment fund, you will see many companies across multiple industries. KiwiSaver scheme providers structure your investment this way particularly to spread risk and minimise the impact of unforeseen downwards trends.
Source: Google Finance
In conclusion, as company valuations are susceptible to downgrades, you can lose money on KiwiSaver. However, history tells us that investing in stable markets, KiwiSaver schemes have likely grown in value in the long term. Let’s take a look at the NZX50 Market Index from inception in 2003 to the end of 2021. We can see dips and drastic loses along the way but the value over those 18 years has increased 585%. This leads us to the ultimate point in this topic. Timing is everything.
The benefits of KiwiSaver far outweigh any disadvantages, however, it is still important to be aware of them. Especially when joining KiwiSaver, these shouldn’t come as a surprise.
A KiwiSaver scheme is generally considered a non-liquid asset. A liquid asset is one that can be quickly and easily turned into cash. As an example, money in your bank account is very liquid as it can be withdrawn at any time. On the other hand, a house is considered a non-liquid asset. A house takes time on the market and a bigger effort to turn into cash. You can withdraw your KiwiSaver investment under only a few circumstances. Such as when you are over the age of 65 and it’s been at least 5 years since joining KiwiSaver. Alternatively, you can apply for KiwiSaver withdrawal when purchasing your first home or in rare circumstances in extreme financial situations.
For many New Zealanders, KiwiSaver is the only investment 'basket' they put their hard-earned savings into. When it comes to financial freedom and investment, setting up KiwiSaver should not be your only move. The KiwiSaver scheme is a great initiative as the minimum step towards financial freedom into your retirement. But, you should also be looking at diversifying with different investments. Have you done any research into property investment? Is there a business with a strong outlook but in need of cash, which you can invest in? Are there other high-performing mutual funds to invest in? Ultimately, if you are investing more than 3% of your wages into KiwiSaver, you should be asking yourself why.
KiwiSaver sign up should be a no-brainer. It can play a big role at important stages of your life. But, setting up KiwiSaver isn’t the ONLY tool for financial freedom.
According to the Financial Markets Authority 2021 Annual Report the average person has a balance of $26,410 in KiwiSaver. This KiwiSaver investment figure is up 29% from the previous year.
Meanwhile, the total number of people that have completed the KiwiSaver sign up process and are currently members is 3,090,631. People joining KiwiSaver lifted this figure up by 2.1% from the previous year.
Your KiwiSaver balance is a combination of your contributions, your employer and government contributions, and your KiwiSaver scheme performance. When using KiwiSaver self employed, your and employer contributions are one and the same. The three types of contribution (you, employer, and government) collectively make up your KiwiSaver investment. Your KiwiSaver scheme invests contributions in your chosen funds with the goal to yield a positive return on your investment. Thus the purpose of joining KiwiSaver is to incentivise Kiwis to save and invest for the future.
Out of 3,090,631 people registered in a KiwiSaver scheme, only 1,883,118 members contributed to their accounts. If they don’t contribute themselves, this means they don’t receive any government or employer contributions either. Thus, are solely reliant on the KiwiSaver scheme performance for their balance to increase.
KiwiSaver started in 2007 and is relatively young compared to other retirement schemes. Therefore the median balance is still relatively low (although growing at a good rate). Consistent contributions and an incremental positive return on KiwiSaver investment will undoubtedly lead to growth in the average KiwiSaver balance.
Whether considering KiwiSaver self employed or your employer has handed you a KiwiSaver sign up form, you shouldn’t think twice. It’s never too late to start saving for retirement and joining KiwiSaver is a great way to start.
If you’re planning to move permanently out of NZ, it’s fair to ask what will happen with your KiwiSaver investment. Well, there are two answers depending on where you emigrate to. Different KiwiSaver rules apply when you are moving permanently to Australia compared to the rest of the world.
If you move to Australia permanently, you can request to transfer from your KiwiSaver scheme to an Australian superannuation scheme. Simply reach out to your KiwiSaver provider and they will guide you through the process. Your selected Australian superannuation scheme must be regulated by the Australian Prudential Regulation Authority (APRA). In addition, they must also be willing to accept the transfer from the KiwiSaver scheme. All contributions and the interest you’ve earned since joining KiwiSaver are eligible for the transfer into an Australian superannuation scheme. You can also leave your KiwiSaver investment with your current scheme provider. However, you can’t request an early KiwiSaver withdrawal when moving to Australia.
If you move to any other country permanently, you can request an early KiwiSaver withdrawal. You can withdraw your, and employer contributions, interest earned, and any fee subsidies or $1000 kickstart since setting up KiwiSaver. However, you cannot withdraw any government contributions since joining KiwiSaver. You can normally withdraw your KiwiSaver balance after living overseas for 1 year (not including Australia). If the foreign country has an approved superannuation scheme, you can apply for a transfer. The foreign scheme must comply with regulations as per the KiwiSaver Act 2006 (section 228).
If you move overseas short-term or plan to eventually return to NZ, you can leave your KiwiSaver scheme account open. While you aren’t employed in New Zealand, you can continue to make contributions to your KiwiSaver.
The short answer is no, you cannot gift your KiwiSaver balance to someone else. As we’ve mentioned once you’ve gone through the KiwiSaver sign up process, you can only withdraw under certain circumstances. Those are when you reach the age of retirement (65), purchase your first home, or are under financial hardship.
However, you can switch KiwiSaver scheme and funds, and we can help identify the best options available to you. For example, if you’re joining KiwiSaver self employed and after a while, you are employed by someone else, you can change to your employer’s preferred provider. However, your decision should be made based primarily on your circumstances rather than external factors.
The KiwiSaver scheme was created to serve as a way for Kiwis to enjoy a comfortable retirement without financial stress. Thus, since setting up KiwiSaver, strict limitations over account transactions were introduced to ensure you’re secure in the long run.
If you want to support someone else by gifting to their KiwiSaver, you can make additional contributions on their behalf. Most providers have a direct deposit option available for additional contributions. You simply need to ask the person you want to gift it to and they should have those details available. Similarly, they also can’t withdraw or transfer their balance to someone else.
Your intention may be to use your KiwiSaver balance as your first home deposit. When purchasing a home for the first time with someone else, you can both apply to withdraw your KiwiSaver balance. That way, you can combine and use your KiwiSaver to contribute towards your house deposit.
Once again, from KiwiSaver sign up to your first home purchase or retirement, your goal must be the same. That is to save and invest for a better and stable future.