Massey University\u2019s retirement expenditure guidelines for 2025<\/a> showing pensioners are currently spending more each week than they receive in New Zealand Superannuation.<\/p>\nThe findings found a single person living a \u201cno frills\u201d lifestyle in metro centres was $166.92 a week short and $42.33 a week short in provincial areas.<\/p>\n
For single people with a \u201cchoices\u201d lifestyle, they have to top up by $252.20 a week in the metro centres and by $233.47 in the provincial areas.<\/p>\n
John Berry, CEO and co-founder of Pathfinder KiwiSaver, said the upcoming changes to KiwiSaver contributions are a step in the right direction.<\/p>\n
\u201cThey help move us incrementally towards better retirement outcomes for Kiwis,\u201d he said.<\/p>\n
But Berry said the real concern is the lack of a long-term map.<\/p>\n
\u201cWe need a plan to continue incrementally increasing contribution rates, and announce the timing well in advance.<\/p>\n
\u201cThis will result in higher savings for decades to come, ensuring the next generation of Kiwis can feel confident about their financial futures and retirement outcomes.\u201d<\/p>\n
He said any long-term plan needs to have cross-party political support.<\/p>\n
\u201cTinkering or flip-flopping on rules risks undermining credibility and trust in KiwiSaver.\u201d<\/p>\n
However, Berry acknowledged that many Kiwis were finding it tough right now.<\/p>\n
\u201dFor many, it\u2019s hard to imagine increasing contributions in a cost-of-living crisis, and it\u2019s hard for businesses with tightening margins.<\/p>\n
\u201cThe fact that the current changes have a temporary opt-out should help with planning and affordability.\u201d<\/p>\n
He said the Government\u2019s decision that 16 and 17-year-olds will now qualify for employer KiwiSaver contributions will also encourage stronger saving habits for younger people. <\/p>\n
\u201cThey have been paying PAYE tax, so it seems only fair they receive KiwiSaver benefits.\u201d<\/p>\n
KiwiSaver changes: What you need to know<\/p>\n
What changes are happening?<\/p>\n
From April 1, the default KiwiSaver contribution for both employees and employers will rise from 3% to 3.5%. <\/p>\n
This will then increase again to 4% from April 1, 2028.<\/p>\n
Why is the Government increasing the default contribution rate?<\/p>\n
Announced as part of Budget 2025, Finance Minister Nicola Willis says increasing the contribution rate to 4% will \u201clift savings and provide greater security for Kiwis\u201d.<\/p>\n
Willis says \u201cthe KiwiSaver balances of employees contributing at the new 4% default rate will grow faster than they do at the current 3% default rate, providing a larger balance at age 65 and a larger deposit when people use KiwiSaver to buy their first home\u201d.<\/p>\n
What do I need to do?<\/p>\n
Nothing. The change happens automatically.<\/p>\n
What if I can\u2019t afford the increase in contributions?<\/p>\n
If you can\u2019t afford the new rate or wish to save in other ways, you can apply for a temporary reduction rate.<\/p>\n
This will allow you to continue contributing at a rate of 3%. However, if you do so, your employer can also choose to drop their contribution to 3%.<\/p>\n
A temporary rate reduction can be applied for through the Inland Revenue Department\u2019s myIR for a period of three months to one year. Once approved, you will need to submit it to your employer.<\/p>\n
You can reapply as often as you need, but must resubmit the application or you will default back to the 3.5% rate. When moving back to the 3.5% rate, Inland Revenue will notify your employer of the change.<\/p>\n
You can apply for a temporary rate reduction at any time and you do not need to wait for the period to end if you wish to increase your contribution again. Inland Revenue will notify your employer ahead of time when a temporary rate reduction period is ending.<\/p>\n
Cameron Smith is an Auckland-based business reporter. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.<\/p>\n","protected":false},"excerpt":{"rendered":"While the extra $7 a week might not seem like much at first glance, the backdrop of lingering…\n","protected":false},"author":2,"featured_media":566404,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[32465,64,63,27046,99,56112,27695,186,5587,278586,99906,36687,64404,318,253195,5402,1633,25223,1919,278587,112292,23918,184,185,69113,1793,319,316,7776,5391],"class_list":["post-566403","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-month","tag-au","tag-australia","tag-better","tag-business","tag-changes","tag-feels","tag-finance","tag-from","tag-haircut","tag-incoming","tag-its","tag-kiwisaver","tag-know","tag-lighter","tag-likely","tag-little","tag-need","tag-next","tag-notice","tag-packet","tag-pay","tag-personal-finance","tag-personalfinance","tag-result","tag-retirement","tag-to","tag-what","tag-you","tag-your"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/566403","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=566403"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/566403\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/566404"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=566403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=566403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=566403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}