KiwiSaver Rate Change Overview

SPEAKER_00 0:00

All right. Well, Kiwi Saver and the new contribution rate changed in April 2026. Now, I've got Dave in the house today. We're going to talk about what it means for an average Kiwi and what's yet to come. Hello, Dave.

SPEAKER_01 0:14

Morning. So yeah, lots going on out there in the press at the moment with what the government are going to do if they get re-elected with Kiwi Saver.

SPEAKER_00 0:22

Yeah. So this year from April, a lot of people would have noticed that their Kiwi Saver contribution's gone to 3.5. Yeah. They can revert back to 3% if they wanted to. But did you know

Why Most People Stayed At 3.5%

SPEAKER_00 0:33

90% of people stayed at 3.5%?

SPEAKER_01 0:36

That's right. Funny you say that because I've got that stat right here as well. How cool is that? Incredible, right? So it must be a good stat. But it is amazing how many people don't take that seriously with regards to the difference it can make if you put an extra percent in. So that percentage rise is going to go with the current legislation. It's going to go up to 4% in two years.

SPEAKER_00 0:55

Okay.

SPEAKER_01 0:56

So that'll be a minimum of four, which is great.

SPEAKER_00 0:58

Yeah.

SPEAKER_01 0:59

But a lot of people are losing a lot of money by not putting in that extra little bit of percent in, which could cost them 20 bucks a week, right? Extra to put an extra percent in or $20, $30 a week, which can make hundreds of thousands of difference in their retirement.

SPEAKER_00 1:12

Yeah. Exactly. Now, I'm going to throw in a tip here right now for people. Yeah. Is if you've got a young person in your life, let's say you've got a kid that's about to start a job,

Set Young Workers Up At 10%

SPEAKER_00 1:23

get them to do their Kiwi Saver at 10%. Because at that point, it's not that much money that they're earning, they don't know the difference, and they're just used to doing 10% straight off the bat.

SPEAKER_01 1:33

Absolutely agree. And what happens is when you do it from the start, like you just said, that it comes out of their salary. So they don't see it. They don't go, oh my God, I've now got to put this away for some savings or whatever, and I'm losing that. They're just getting what they get. So if they start putting 10% in now, they are really sorting themselves out for their first home really well, and obviously for retirement later. But it is, you know, there's a lot of changes coming if national get in.

SPEAKER_00 1:58

So right, let's talk about that for a moment. The email came through on the weekend from the national, and then I guess it was all over social media, print, etc.

$1,200 For Babies In KiwiSaver

SPEAKER_00 2:05

And that excited me. For the first time ever, I got excited for some sort of initiative from the government. Yep. So babies.

SPEAKER_01 2:13

Babies, yep.

SPEAKER_00 2:14

They're gonna get twelve hundred dollars for each child that's born and enrolled into a Kiwi Saver. Yep. Which is awesome because back in the day that used to be a thousand dollar contribution. Correct. And now it's gonna be twelve hundred. Yep. I guess it opens up debate for those that, oh, you know, we don't have the kids, how's that gonna benefit us? Da-da-da-da-da. But I mean, I don't take public transport and people get discounts on public transport, that doesn't help me either.

SPEAKER_01 2:37

That's it's not a great argument, is it, when people go, well, what does that mean for me? I think what it means for our country is education of young people, right? So they've got that straight away. And one of the biggest issues for Kiwi Saver is getting younger people engaged at at 16 when they're thinking about work or 18, and getting them engaged into Kiwi Saver to take it seriously and talking, getting talking to somebody about it. Normally it's mum and dad that hold all that information, but if they've got twelve hundred dollars from birth and that's invested correctly, uh by the age of 15, 16, that's going to be quite a good bit of money.

SPEAKER_00 3:12

Do you know how much? Have you done it?

SPEAKER_01 3:14

Hold the line, Caller. I'd think now my thing's gone out. Where I we did put something. An 18-year-old earning the minimum wage was just under 50. Oh, no, that's talking about later. I didn't get that tip. I should have done that, shouldn't I? That's poor. But it is, but it would like But even just the simple math, right?

SPEAKER_00 3:32

Like if we just assume, I don't know.

SPEAKER_01 3:35

Well, you get say you get 7%. Now, if I was a parent, by the way, and I did this for my son, I would be putting 20 bucks in a week straight into their kiwi saver as well. Yeah. Because it's gonna help them into a first home. It's fixed and you can't touch it so that it's already in there and it can't be touched by anybody, but it's gonna help them with their first home in their retirement, right? So as a parent, I would be doing 20 bucks a week straight in, straight away. It's not that difficult to do that. I know some people struggle and that's fine, but find a way.

SPEAKER_00 4:02

Yeah. I mean, they're gonna have easily at least 20 to 25 to 30 grand. Easy by the time they turn 18. So this is just being conservative on you know 7% fees, etc. So um this is massive.

SPEAKER_01 4:14

Now, the other the other announcement they had was around So one of them is that they are going to make it compulsory

Push Toward Compulsory 12% Savings

SPEAKER_01 4:21

and look at a total of 12% into KiwiSaber, which means six from yourself and six from your employer. That's moving a lot more towards the Australia model, which is very robust. They've they're now putting in, I think companies put in up to they can for some up to 10 to 12%, depending on where they live. That's been going a long time, and the companies just accept it, it is what it is. So it's gonna it's gonna be a change for us here, but I think it's a positive one. Yeah, making it compulsory and then pushing that rate up is we've got to look after our retirement and we've got to have people retire in comfort and not struggle.

SPEAKER_00 4:56

It makes sense to me. And you know, like I deal with a lot of range of clients, right? And often I see clients that um churchgoers, yeah. And they find money to put 10% into tithing. And that blows my mind that they wouldn't put that much into their own Kiwi7. Yeah, yeah. And it's not that I'm against the tithing, don't get me wrong, but I feel like people should really pay themselves first. Yeah, and any book you read, any investment books you read always talks about pay yourself first.

SPEAKER_01 5:23

Yeah, yeah, and it's a great philosophy to live by. Pay yourself first, then then everybody else you can help. Don't stop helping people, but make sure you can afford to do it and that you're not gonna struggle later on in life.

SPEAKER_00 5:35

Exactly. And it's that building for the future, not just leaving for today.

SPEAKER_01 5:40

Absolutely, absolutely. And and so look, this is gonna help. There's there's a lot of people still take uh what we used to call a payment holidays, and so they've they put the kiwi saver aside and decide that they want to put money back into their life and world. I'm a little bit cynical with that because it means your employer doesn't have to give you that three and a half percent. So I would take that as much as she can.

SPEAKER_00 6:02

Yeah, because another initiative they're talking about is about people that on maternity leave, for instance.

SPEAKER_01 6:07

Yeah, very positive.

SPEAKER_00 6:08

And what happens there, correct?

SPEAKER_01 6:09

So one of the changes they're

Fixing Gaps For Mums And Over-65s

SPEAKER_01 6:11

looking at is to pay mums. So one of the big gender gaps is with Kiwi Saver, where you could both be at the age of 65 and the females is below because she's had a break having kids. So the government are looking at making payment to mums while they're on maternity leave, which is great. I think that'll help a lot with with making sure that that's still building a retirement fund for for mums as well. So that's a real positive move. Another thing that's happening is the retirees they're saying that uh employees are still gonna have to pay people over the age of 65 or the retirement age. So if they're still working, they're still eligible, which I believe is correct and should happen, they're still eligible to receive Kibi Saber.

SPEAKER_00 6:55

Yeah, that always made me wonder like what why? Why when they turn 65, you suddenly don't have to.

SPEAKER_01 7:01

And if you want them working for you and they're a good worker, why should they be treated differently to people under 65?

SPEAKER_00 7:06

Exactly.

SPEAKER_01 7:07

So yeah. So look, some some real positive changes coming up.

SPEAKER_00 7:10

I love it.

SPEAKER_01 7:10

If national staying.

unknown 7:12

Yeah.

SPEAKER_00 7:12

Well, yeah, the d disclaimer here is Ts and C's. So it'll be interesting to do this podcast a year later. Yeah. Dave.

SPEAKER_01 7:19

It will be it'll be very interesting to look at it.

SPEAKER_00 7:21

And have a look, you know, how far we've come and what happened then. But you're right, like I think as New Zealand, we do need to take collective responsibility for the financial future of our country. Absolutely. We're a small enough country to make awesome changes.

SPEAKER_01 7:35

Yep, agreed.

SPEAKER_00 7:36

But at the same time, I feel like if we do something wrong, it is gonna affect the whole country as well.

SPEAKER_01 7:41

Yeah.

SPEAKER_00 7:42

So this is where the future generation needs us to implement things now and not wait.

SPEAKER_01 7:48

Yeah, absolutely agree. And and we talked about in previous podcasts as well about will the government super be enough to live off and is it still gonna be there? And this is us taking control of saying, well, actually let's take control of our own destiny, and if it's still there, then it's a bonus.

SPEAKER_00 8:05

Yeah, beautiful. Thank you so much. Any other changes that we need to mention?

SPEAKER_01 8:08

No, that's that's pretty much the main ones. Oh, they're the main ones, yeah, yeah.

SPEAKER_00 8:12

Yeah. Yep. No, that's uh I mean, I guess the question to national from the public has been is where are they going to get all this billions of money

Who Pays And What To Watch

SPEAKER_00 8:20

towards contributing?

SPEAKER_01 8:21

Yeah, and businesses that may be maybe on the you know, not struggling but live day by day might struggle to then pay that extra. But yeah, you know what? I I who knows, there might be some help for that as well. Yeah. So, but but I think it's it's just it is a positive move.

SPEAKER_00 8:36

Yeah, absolutely. Awesome. Thank you, Dave. See you next time.