Page last updated: 06 September 2023


KiwiSaver is a voluntary work-based savings scheme set up by the Government to encourage New Zealanders to prepare for retirement. You can also use KiwiSaver to buy your first home. It may be your first investment and is likely to represent a large part of your retirement savings.

KiwiSaver is a managed fund. This means your money is pooled with other investors and spread across different kinds of investments.


You must be a New Zealand citizen or entitled to live in New Zealand indefinitely to join KiwiSaver

You’ll either be automatically enrolled when you start a new job or you can opt in – through your employer’s scheme or directly with a scheme provider. If you don't choose a scheme for yourself, and your employer doesn't have a chosen scheme, Inland Revenue will allocate you to one of the six government-appointed default providers. You can change KiwiSaver scheme whenever you like – even if you’ve already been allocated to an employer-chosen scheme or a default scheme.

You can choose how much to contribute

If you’re employed, you can contribute 3%, 4%, 6%, 8% or 10% of your salary before tax to a KiwiSaver scheme. You can also make lump sum payments or set up additional direct payments.

If you’re self-employed, you decide how much you want to contribute and make payments directly to your chosen KiwiSaver scheme provider.

Your employer and the Government contributes too 

Your employer must contribute at least 3% of your salary. And if you’re aged 18 or over, the government will also give you an extra 50 cents for every dollar you put in, up to a maximum payment of $521.43 each year. To get the full Government contribution, you have to contribute at least $1,042.86 by June 30 each year.

Growth and aggressive funds have higher long-term returns

Unlike a bank term deposit, the return you get from your KiwiSaver scheme will go up and down over time, depending on what it’s investing in.

Growth and aggressive funds have a much higher proportion of ‘growth’ assets. Growth assets are things like shares and property and these go up and down in value more frequently than ‘income’ assets like cash and bonds. This means their returns may rise and fall quickly. However over time they typically provide a higher return.

Read our 'Spotlight on growth funds'

Balanced and default funds sit in the middle

A balanced fund is one that will target having between 35% and 63% of ‘growth’ assets. That makes it less volatile than a growth fund but more likely to grow in value over the longer term than a conservative fund. ‘Default’ funds have a balanced investment mix.

Read our 'Spotlight on balanced funds'

Read more about default funds

Conservative and defensive funds have the lowest returns

Conservative funds will have a very low percentage of growth assets – 10% to 34.9%.  Defensive funds will often have none. They offer lower, but more predictable returns and are best if you are wanting to access your money – for retirement or a first home – in the next few years. They are also suitable if you have low tolerance for ups and downs in your balance.

Read our 'Spotlight on conservative funds'

Default funds may not be suitable if you’re buying a first home soon

If you’re planning to withdraw your money (for example for a first home), a default fund may not be suitable. A conservative or a defensive cash fund might be a better choice. You can find the right fund for you or compare funds on the Sorted KiwiSaver fund finder.

Your money is locked in

Once you’ve joined KiwiSaver, your money will be locked in until you qualify for NZ Super (currently 65), with a few exceptions, including first home withdrawals.

Fees can have a big impact on your total returns

It’s worth keeping an eye on the fees you pay because as your balance grows, your fee will too. Here's how to understand the costs:

  • How big your KiwiSaver balance is – the bigger the balance, the greater the fee
  • The type of investment fund you’re in – generally lower-risk funds are cheaper than higher-risk funds (but remember lower-risk funds give less overall return)
  • Your KiwiSaver provider – some providers charge higher fees than others

Your personal annual statement shows the dollar amount paid in fees

Typical fees include:

  • Management fee – pays the fund manager who decides how each fund is invested. This fee is different for each fund as some funds need more management than others. It’s calculated as a percentage of the fund’s net assets.
  • Member fee – covers the administration of your personal KiwiSaver account. It’s usually deducted monthly.
  • Administration fee – contributes to the administration of the scheme as a whole.
  • Supervisor or trustee fee – pays the supervisor or trustee for overseeing all funds offered by the scheme and for holding the fund’s assets.
  • Performance-based fee – a bonus paid to the fund manager for achieving a return that’s better than the target return. Only a few KiwiSaver managers charge a performance-based fee but a larger number of KiwiSaver managers invest through other investment managers – called ‘underlying managers’ – who may charge performance fees.

You may also be charged fees to:

  • pay the fees of underlying managers (sometimes including performance fees)
  • change your investment options
  • transfer savings from another NZ KiwiSaver or superannuation scheme
  • withdraw money from your KiwiSaver scheme.
  • Be passed onto your financial adviser who gives you regular KiwiSaver advice. Often this fee can be stopped if you cease to use the financial adviser.

More information about the actual fees you pay can be found in the product disclosure statement for the scheme.

Get your settings right

Ask yourself the following questions when you set up your KiwiSaver savings.

  1. Are you in the right fund?
  2. Could you be saving more?
  3. Are you paying too much in fees?

Get familiar with the jargon

KiwiSaver providers have an obligation to clearly explain KiwiSaver so ask questions about anything you don’t understand.

Read your personal annual statement

Review your KiwiSaver account at least once a year. The ideal time to do this is when you receive your annual member statement.

Your annual statement will show your current balance, and what your KiwiSaver savings may be worth at age 65. It also shows money that has gone in and out of your KiwiSaver account in the past year. Money going in includes all contributions received from you, your employer and the Government. Money going out includes tax, the fees you pay your provider and any withdrawals you’ve made during the year.

Find out what’s happened to your Scheme in the past year

All managed funds (including KiwiSaver) must give you a copy of their annual report, or a link to it on their website, within six months of the end of their financial year.

The annual report describes any changes made to the scheme in the last year, how it’s being managed, how investments have performed against the scheme’s goals, and if the auditor has raised any concerns. It also gives details of the size of the scheme’s membership, total funds invested and investment returns.

In addition to the annual report, KiwiSaver funds issue a quarterly fund update and an annual update. Fund updates give details of how each individual fund has performed, what it’s costing you and other key information. You’ll find fund updates on your provider’s website, or on Smart Investor.

Don’t be spooked if your KiwiSaver balance falls

This is a normal part of investing and reacting by making changes when the value is low will often make things worse.

Regularly review your fund choice

KiwiSaver providers offer a range of different types of funds. You can invest in more than one type of fund at once, and you can also change your fund at any time.

If you’re not sure about changing funds, you can leave your savings in the current fund, but ask for new contributions to go to the new fund. This can be a good idea if you are changing because you are nervous about volatility.

Keep up your contributions

You can suspend your KiwiSaver contributions if you need to for a maximum of 12 months. But KiwiSaver is designed to deliver value over time through the drip-feeding of contributions regularly into the fund. 

And, your employer will in most cases stop contributing to your KiwiSaver fund when you do. You will also miss out on the Government contribution – the Government will give you up to $521.43 if you contribute $1042.86 of your own money to your KiwiSaver fund in the year to June 30. Even if you don’t contribute the full amount, you’ll still get 50 cents for every dollar you put in between 1 July and 30 June the following year.

So if you need to stop contributing for a while make sure you remember to start contributing again when you’re able.

Compare your KiwiSaver provider with others

You can change your KiwiSaver scheme provider whenever you like, but you can only have one KiwiSaver account at a time.

You should not be pressured to join any particular KiwiSaver scheme. Be wary of KiwiSaver schemes being sold as part of a bundle of other services, with a special offer attached, or through door-to-door sales. If you've felt presured to sign up for a KiwiSaver fund, please contact us.

Transferring NZ superannuation funds into KiwiSaver

If you are a New Zealander wanting to transfer money you have saved in a private or workplace superannuation scheme into a KiwiSaver scheme, you need to check the following:

  • Do the trust deeds of your superannuation scheme and the KiwiSaver scheme allow you to transfer?
  • Do the trustees of your superannuation scheme and the manager of the KiwiSaver scheme agree to the transfer?

Once your money is in KiwiSaver, it is locked in until you qualify for NZ Super (currently 65), with a few exceptions. This may not be the case with the money in your private or workplace savings.

If you would like advice about transferring, you should talk to a financial adviser who specialises in superannuation and KiwiSaver or you can contact the IRD.


FMA Investor Profile - Jane Wrightson
Retirement Commissioner, Jane Wrightson describes herself as a ‘life-long learner’ in this FMA investor profile.
Update on the KiwiSaver default scheme provider change process
Six default KiwiSaver providers announced by Government.
Spotlight on: Balanced Funds
The FMA editorial team talks about managed funds in this article.
Spotlight on: Conservative Funds
The FMA editorial team talks about conservative funds in this article.