And it’s younger people on incomes under $50,000 that are being hit hardest.
Consumer NZ chief executive Jon Duffy says it’s a troubling trend.
“When young people have to dip into their KiwiSaver just to get by, they’re borrowing from their future selves.”
The Retirement Commission has also released a study on trends among long-term savers.
For the first time, it asked actuaries Melville Jessup Weaver (MJW) to study KiwiSaver balances to see if people were contributing.
Researchers analysed 98% of all KiwiSaver balances to look at income and work patterns.
Consumer NZ CEO Jon Duffy is concerned that young people are dipping into their KiwiSaver accounts.
The commission found that for those in steady paid work earning more than $50,000 (the annual minimum wage), 90% of people were contributing to their KiwiSaver fund.
But a key issue was highlighted – the persistent gender gap.
It means the savings balance gap between men and women is just over $9000 – or 24%.
The glimmer of good news is that it has come down from 25%.
Te Ara Ahunga Ora policy lead Dr Michelle Reyers said the findings show the scheme is delivering strong results for many.
“But the flipside is just as important. People on lower incomes, those working part-time, or those moving in and out of paid work are much less likely to contribute and their KiwiSaver balances at age 65 reflect these reduced contributions,” Reyers said.
And it gets worse for many women.
That gap rises to an average of 36% at ages 56-65.
Reyers said the issue is compounded because women, on average, tend to live longer than men and therefore have less income to support their retirement.
“If we want more New Zealanders to build meaningful savings, we need to focus on closing these gaps. This includes looking at ways to reduce contribution interruptions, such as support during periods of paid parental leave, and targeting incentives toward low-income earners who are less likely to contribute and most at risk of low balances,” Reyers said.
“KiwiSaver remains a critical part of the retirement income system, but it is not the only part. NZ Super plays a critical role by providing a foundation that does not depend on income or contribution history.”
Average balances are increasing – moving up 11% in 2025 from the previous year to $41,286.
Fewer members now sit under $10,000 (down from about 41% in 2021 to about 33% in 2025) and a growing share hold more than $80,000 (up from about 8% in 2021 to about 15%, around 450,000 members).
KiwiSaver is shaping up to be an election year battleground.
New Zealand First wants to create a “KiwiSaver generation” by having every newborn automatically enrolled in a scheme.
Polling released late last week shows Kiwis are in favour of that idea.
And earlier research showed full and partial withdrawals from schemes are on the rise.
Consumer NZ said its research also highlights another risk for savers.
Duffy is worried people are staying in default KiwiSaver settings without checking whether their funds suit their goals.
“Only 31% of people chose their scheme independently, with most using the default. That’s a big red flag, especially when fees, risk level and long-term returns can add up to a substantial difference over a member’s working life.”
He urges people to take 10 minutes out of their day to check who their providers are, what fund they are in, what fees they pay and whether the settings still match their circumstances.
“Switching is an easy and straightforward process, and I encourage all KiwiSaver members to shop around.
“Don’t sleepwalk into retirement. You could be paying too much in fees or missing out on better returns. The more people switch, the healthier the competition – and that’s better for consumers.”
The Retirement Commission’s report looked at data held on 3.3 million KiwiSaver members with total balances of more than $138 billion.
Katie Bradford is a Senior Correspondent at the Herald. She has been a broadcast journalist for over 20 years and was based in the press gallery for 10 years. She specialises in politics, business and Auckland issues.