KiwiSaver average balance passes $40,000 while 1.42 million members put nothing in

The average KiwiSaver balance has passed $40,000 for the first time in the scheme’s 19 years, reaching $40,340 in the year to 31 March 2026. The number comes from the KiwiSaver Annual Report 2026, released on Thursday by the Financial Markets Authority, which is required to report to the responsible Minister each year on the scheme it helps regulate.

Behind the milestone sits a much larger pool of money. Total funds under management hit a record $138.8 billion, up 12.8 percent on the year, and more than double where the scheme sat in 2020. Membership reached 3,440,473, an increase of 1.6 percent, with 112,471 people joining during the year. Contributions of $13.2 billion and investment returns of $10.7 billion did the heavy lifting, with returns alone up from $6.4 billion the previous year.

The average is not the whole picture, though, and the report is candid about that. At year end 1.42 million members were not contributing regularly, a rise of 3.3 percent and equal to 41.3 percent of everyone in the scheme. The FMA defines a non-contributing member as someone whose account has received nothing for two months, or who has missed their agreed contribution frequency. Some of that group has a good reason. More than 374,000 members are under 18 or over 65, and others are between jobs or out of paid work. A further 117,384 people were on a formal savings suspension, which lets an eligible member pause contributions for anywhere between three months and a year.

Even so, the contributing side of the ledger barely moved. The number of members actually putting money in rose just 0.5 percent to 2,019,474, while the non-contributing group grew six times faster. Member contributions themselves climbed 11.1 percent to $8.7 billion and employer contributions rose 4.1 percent to $3.5 billion, which means the growth came mostly from people who were already contributing paying in more, not from more people starting.

Money is also coming out faster than before. Members withdrew $6.8 billion during the year, up 15.7 percent. Almost half of that, $3.3 billion, went to members aged 65 and over, up 10.5 percent. Interestingly, the number of people cleaning out their account entirely at 65 fell 2.9 percent to just over 30,000, which the FMA reads as a sign more retirees are leaving some or all of their savings invested rather than treating the scheme as a lump sum to be cashed up.

First home buyers took out a record $2.2 billion, an increase of 25 percent, with more than 50,000 members dipping into their savings to help buy a house. That single category now accounts for 32 percent of all withdrawals. Hardship withdrawals also rose, reaching $531.5 million across 51,609 separate withdrawals, up 19.8 percent, although the FMA notes the rate of increase was slower than in the previous two years.

Commerce and Consumer Affairs Minister Cameron Brewer seized on the competition figures in the report. Members switched funds 460,000 times during the year, moving $11.9 billion between funds run by the same provider, and a further $7.4 billion moved between schemes altogether, up from $5.5 billion in 2025 and $3.9 billion in 2024.

“Competition is a key focus for this Government, and this report shows it working. Members switched funds 460,000 times last year and $7.4 billion moved between providers, up from $5.5 billion. If your provider isn’t delivering, you can move, and hundreds of thousands of Kiwis did exactly that,” Brewer said in a statement. “Check what fund you’re in, check what you’re paying, and don’t be afraid to shop around.”

What members paid for the privilege also went up. Total fees deducted from KiwiSaver schemes reached $978.2 million, an increase of 12.6 percent, tracking closely with the 12.8 percent growth in the funds those fees are charged against. As a share of funds under management, fees have sat at around 0.7 percent for three years running after a long slow decline over the previous decade. The FMA has said it will research recent trends in provider fees during the current financial year.

The mix of what people are invested in keeps shifting towards risk. Growth funds now hold $68 billion, or 49 percent of all KiwiSaver assets, up from 47.5 percent a year earlier. Balanced funds, which include the six default funds, hold $37.4 billion and conservative funds $21.2 billion, both down slightly as a share.

Head of Investment Management Emelie Jensert said the numbers pointed to a scheme still maturing. “Passing $40,000 on average is an important milestone. For many New Zealanders, KiwiSaver will be one of the largest financial assets they hold, so it matters that members understand their choices and stay engaged over time,” she said in the FMA’s release. “As KiwiSaver grows in scale, the expectations on providers also increase. Strong governance, fair conduct, and clear disclosure are essential to ensuring that members understand what they are invested in and can make informed long-term decisions.”

One number in the report will look different next year for reasons that have nothing to do with markets. Government contributions stayed just above $1 billion, down 0.4 percent, but from 1 July 2025 the Crown halved its top-up from 50 cents to 25 cents for every dollar a member puts in, with the maximum annual entitlement now $260.72. Because that money is paid out each July for the year ending 30 June, the cut does not show up in these statistics at all. It lands in the 2026/27 reporting year.

The report also carries two warnings that come with a bigger pot of money. The FMA said it remains concerned where past investment performance is a central feature of KiwiSaver advertising, particularly where it risks creating unrealistic expectations about future returns. And it said it has seen evidence of fraudulent KiwiSaver withdrawals, noting that as the average balance grows so does the incentive for scammers. Fraud detection and prevention is now a stated regulatory priority.

For all the growth, the scheme is still firmly in its saving-up phase. Contributions exceeded withdrawals by $6.4 billion over the year, a gap that has held broadly steady even as withdrawals climb.

Has your KiwiSaver balance kept up with the average, and have you checked what fund you are in lately? Tell us 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 🙂