More than half of eligible KiwiSaver members have not contributed enough to receive the full $260 government tax credit this year, according to Westpac. The proportion missing out has risen for three consecutive years, and is highest among 16 and 17-year-olds, women aged 18 to 24, and self-employed workers.
More than half of eligible KiwiSaver members are on track to miss out on free government money this year, with the proportion rising for the third consecutive year. The government pays $260 into the account of any KiwiSaver member who contributes at least $1042 before the end of the financial year. That is a guaranteed 25 percent return on the first $1042 saved — a rate that is not available on any ordinary savings account in New Zealand. Yet the latest data from major providers suggests a significant portion of members are not taking it up.
Westpac said 53 percent of its eligible KiwiSaver members had not contributed enough to qualify — up from 49 percent last year and 48 percent in 2024. ANZ, the largest provider, was at roughly the same level, with around 53 percent of eligible members having contributed enough by the end of May.
The problem is most acute among newer members. This is the first year that 16 and 17-year-olds became eligible for the government contribution. Westpac said 96 percent of that group were on track to miss out, largely because many were still in high school and not yet in sustained employment.
Andrew Twidle, chief executive of BTNZ, which runs the Westpac KiwiSaver scheme, said the gender gap was also notable. Women accounted for about 60 percent of all working KiwiSaver members who were currently on track to miss out on the full contribution. The gap was particularly wide in the 18 to 24 age group.
Retirement Commissioner David Boyle said the overall figure was alarming, particularly given that the contribution rate required was modest — anyone working full-time at minimum wage and saving at the default KiwiSaver rate should reach the $1042 threshold over the course of a year.
"More New Zealanders perhaps not working or who have been made redundant, self-employed contractors," Boyle said. "It does highlight the challenges environmentally but also New Zealanders are missing out on money that could be used and should be used for helping them to be in a better place in retirement."
Some providers have taken different approaches. Kernel founder Dean Anderson said 86 percent of its members were actively contributing, with 24 percent not on track to receive the full credit — a figure well below the industry average.
The challenge for members who have missed contributions so far is time. The June 30 deadline means there are only a few weeks left to make a voluntary contribution and still receive the government bonus. For those who miss the window, the opportunity is gone until the next financial year.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.