When New Zealand’s pension was introduced in 1898, set at age 65, male life expectancy was around 56 years. It was never meant to be paid en masse – it was a safety net for the few outliving the odds. Today, over 16% of New Zealand’s population is aged 65 or older, heading towards 20-21% within the next decade. We’ve gone from around 750,000 receiving NZ Super back when I wrote that article to over 912,000 today.
What Treasury said in Hamilton
At February’s New Zealand Economics Forum in Hamilton, Treasury Secretary Iain Rennie warned that ageing is materially lifting expenditure and will continue to do so, outpacing revenue growth – and without policy changes, New Zealand’s debt trajectory will become unsustainable.
The number of people receiving superannuation will grow from 928,000 today to over 1,084,000 by 2029/30 – or roughly the population of Tauranga in just under five years. It’ll cost a cool $7.7 billion more per year, equivalent to 22% of all projected tax revenue growth over that period. Superannuation will consume 18.6% of tax revenue by 2029, up from 16.6% in 2023.
The age question nobody will answer
Back in 2017, Bill English opened the door to raising the retirement age to 67 from 2037. Jacinda Ardern promptly pledged to repeal it and declared she’d resign before raising the retirement age. Labour won, the policy was scrapped, and the age stayed at 65. It hasn’t been raised since.
At the Economics Forum, a panel of economists and former politicians concluded that New Zealand can’t afford superannuation at 65 … or even 67. Some suggested eligibility may need to rise to 72 or 73 for long-term viability. The Romans would recognise the pattern immediately: kick the problem down the road, make the next generation deal with it, hope something changes in the meantime.
It didn’t work for Augustus. It won’t work for us.
What actually needs to happen
Raising the age alone won’t fix things. The deeper issue is savings and productivity. There is no credible path to lifting New Zealand’s productivity without matching Australia’s savings rate. We must take KiwiSaver seriously as the foundation of our retirement system.
With 3.4 million New Zealanders enrolled – 90% of the workforce – KiwiSaver has been a genuine success. But 1.6 million members were making no contributions as of March 2025. If you’re under 50, don’t rely solely on NZ Super. Your KiwiSaver balance is fast becoming the primary pillar of your retirement income.
Some settings are shifting – residence requirements for NZ Super are increasing from 10 to 20 years, phased through to 2042 – but these are adjustments at the margins. The fundamental question of eligibility age remains unanswered.
The 450th edition lesson
In my first article, I concluded that failing to act would be irresponsible and place an extremely unfair burden on younger generations. Nine years later, that’s exactly what we’ve done.
New Zealand is in a stronger position than most comparable countries – Rennie acknowledged that in Hamilton – but public debt is at its highest point in 30 years, and the cost curve is steepening.
The Romans had options. They could have reformed early, adjusted gradually, built a sustainable system. We still have many choices they didn’t. But as Treasury made clear last month, the window for easy answers is closing.
We can avoid making the centurions’ mistake. But only if we start acting now.