David Verry, a financial mentor at North Harbour Budgeting Services, said people were often unaware they could put their contributions on hold.
Photo: RNZ / Quin Tauetau
KiwiSaver contributions continue to rise, despite tougher economic conditions – and some budget advisers say people may not even realise putting their contributions on hold is an option.
There was nearly $2 billion in member contributions added to KiwiSaver in the first quarter of this year, near a record level.
This was before the change in default contribution rate, from 3 percent to 3.5 percent, took effect.
Withdrawals eased 12 percent to $122 million from $140 million in the last quarter of 2025 but were still 12 percent higher than the first quarter of last year.
Financial Services Council chief executive Kirk Hope said KiwiSaver was becoming more central to the financial future of younger New Zealanders.
“Younger Kiwis are the first real KiwiSaver generation. For many of them, KiwiSaver will play a much bigger role in retirement than it did for their parents or grandparents. The positive shift we are seeing is that every year younger New Zealanders are more engaged, more aware of the value of regular contributions and more likely to see KiwiSaver as part of their financial future.”
The FSC industry data shows there are now 3.13 million KiwiSaver members covered in the quarterly snapshot, with an average member balance of $39,800.
Pie Funds chief executive Ana-Marie Lockyer said KiwiSaver contributions would be expected to grow alongside incomes, but that was not the full story.
“Wages were up about 2 percent year-on-year while KiwiSaver member grow was only 0.3 percent but contributions stayed near record highs.
“That suggests a broader shift toward Kiwis prioritising KiwiSaver as part of their long-term financial resilience, even with ongoing cost pressures,” she said.
“As balances grow – now averaging close to $40,000 – KiwiSaver is also becoming a more meaningful and visible asset for many people, which likely supports engagement and contribution levels.
“That said, the underlying data is a bit more mixed. Net contributions were down year-on-year once withdrawals and transfers are included, so the next quarter will be important in showing whether contribution levels remain resilient as budgets tighten further from fuel costs and other pressures.”
Inland Revenue data shows in April 2026, 83,354 KiwiSaver members were on a savings suspension, down from 84,238 in April last year.
Of those, 1128 were eon financial hardship suspensions, which do not have the requirement to have been a member for a year.
About 10 percent of people on a suspensions had opted for a 12-month period.
Since April 1, 2019 KiwiSaver members could apply for a suspension from three months to one year. Previously it was three months to five years.
David Verry, a financial mentor at North Harbour Budgeting Services, said people were often unaware they could put their contributions on hold.
Putting contributions on hold
“The suggestion may come from us however we only recommend suspensions in very dire cash flow circumstances and then only for a short period of time if possible. We always stress the need for KiwiSaver upon retirement.
“Another downside is the employer not having to contribute whilst the employee isn’t, although we have come across enlightened employers who will continue their contributions as they have knowledge their employee is struggling.”
Verry said he was an advocate of compulsion with the ability to suspend for short periods of time and withdraw for hardship reasons.
Shirley McCoombe, of Bay Financial Mentors, said she thought many people did not consider stopping contributions because they were taken from wages before they saw them.
But financial mentor Shula Newland said she dealt with someone recently who was being made redundant and chose to stop them contributions.
“It does beg the question, as to why increase contributions when retirement calculations show that most people will have enough for retirement if NZ Super exists – however the government will start asset testing, so of course they want KiwiSaver to grow more so they don’t have to pay.
“Personally I agree with asset testing, but it just needs to be at the right amount … in Australia it’s $320,000 if you are a home owner, which tends to be close to the amount people need for retirement with NZ Super.”
Rupert Carlyon, founder of Koura KiwiSaver, said he had seen a slight slowdown in voluntary contributions to KiwiSaver because fewer people were motivated to put $1042 in a year to get the government contribution.
“It’s kind of turned into, can I really be bothered?”
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