About half of New Zealanders in KiwiSaver are on track to miss out on a free top-up from the government this year, and the window to fix it closes on 30 June. New figures from the country’s major providers show large numbers of members have not put in enough of their own money to claim the annual government contribution, leaving hundreds of millions of dollars on the table.
The deal is straightforward. If you contribute at least $1,042.86 of your own money to a KiwiSaver account between 1 July 2025 and 30 June 2026, the government tops it up by 25 cents for every dollar, to a maximum of $260.72. Money paid in through your wages counts, and so do voluntary lump sums. Anyone who falls short of the $1,042.86 threshold gets a smaller, pro-rated payment, and anyone who contributes nothing gets nothing.
That $260.72 figure is itself a sore point. The contribution used to be worth up to $521.43, but it was halved in last year’s Budget as the government looked for savings. People earning more than $180,000 a year are no longer eligible at all. So even members who do everything right now receive half of what they collected a couple of years ago, which has dampened the incentive to chase it.
The provider numbers, reported by RNZ, paint a patchy picture. Westpac said 53 percent of its eligible members were on track to miss the full contribution, up from 49 percent last year and 48 percent the year before. ANZ, the largest provider, said just over 53 percent of its members had already contributed enough, with roughly another 17 percent in line for a partial payment. Among the smaller providers the picture was brighter. Generate said 61 percent of members had already qualified, Pie Funds put its figure at 60 percent, and the low-fee provider Kernel reported that only 24 percent of its members were not on track for the full amount.
The starkest gap is among the young. This is the first year that 16 and 17-year-olds have been eligible for the government contribution, after a rule change extended it to working teenagers. Westpac found that 96 percent of that age group were on track to miss out, simply because they had not contributed enough themselves. Retirement Commissioner David Boyle said that was no surprise, pointing out that most of them are students with more immediate calls on their money. He described the overall miss rate as alarming, and noted that about 1.265 million KiwiSaver members are not contributing at all.
Women are over-represented among those falling short. Andrew Twidle, chief executive of BT Funds Management, said that among 18 to 24-year-olds currently on track to miss out, women made up about 60 percent of all working members. That mirrors a wider pattern in which lower pay, part-time work and time out of the workforce leave women with thinner retirement balances over a lifetime.
Providers put the shortfall down to household budgets rather than apathy. Ana-Marie Lockyer, chief executive of Pie Funds, pointed to cost-of-living pressures and the reduced contribution rate as the main reasons members were not reaching the threshold. With rents, mortgage payments and grocery bills still biting, setting aside an extra $1,000 a year is a tall order for plenty of families, even when the return on that money is effectively a guaranteed 25 percent.
The fix, for those who can afford it, is a one-off voluntary payment before the end of the month. Anyone unsure of where they stand can check how much they have contributed since 1 July through their provider’s app or website, or through their myIR account with Inland Revenue, then top up the difference to reach $1,042.86. The payment can usually be made by internet banking or directly through the provider, and it needs to clear before 30 June to count for this year. The government contribution itself lands in accounts a few weeks later, in July or August.
For self-employed people and contractors, the contribution is especially easy to overlook, because there is no employer deduction quietly ticking over in the background. The same is true for anyone who has taken a contributions holiday, recently stopped work, or dropped to part-time hours during the year. For all of them, a single transfer before the deadline turns $1,042.86 into $1,303.58, which is a better one-month return than any term deposit on offer.
If you want to understand how those top-ups compound over a working life, our guide to growing your KiwiSaver faster includes an interactive simulator that lets you test contribution rates, fund types and time horizons against your own numbers.
Are you on track to claim the full government contribution this year, or had you not realised the deadline was looming? Share your experience in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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