The 2025 New Zealand Budget introduced several important changes to KiwiSaver. Some of these changes aim to boost long-term savings, while others may reduce some of the incentives we’ve become used to. Here’s a quick, no-fuss summary of what’s changing and when, and what it could mean for you.
From 1 April 2026, both employee and employer default contribution rates will increase from 3% to 3.5%. Then, from 1 April 2028, that rate will go up again to 4%.
If this increase feels a bit too much for your budget, there’s some flexibility. From 1 February 2026, KiwiSaver members will be able to apply to Inland Revenue to stay at the current 3% contribution rate through an opt-down process. This could be a helpful option for those managing tight cash flow or adjusting to changing financial circumstances.
One of the bigger changes is that, starting 1 July 2025, the government’s annual KiwiSaver top-up will be halved. Currently, the government contributes 50 cents for every dollar you put in (up to $521.43). From July next year, this will drop to 25 cents per dollar, with the maximum government contribution falling to $260.72.
To receive the full amount, you’ll still need to contribute at least $1,042.86 per year.
There’s also a new income cap being introduced. If you earn more than $180,000 annually, you’ll no longer be eligible for this government contribution from 1 July 2025 onwards.
In a positive move, the government is extending KiwiSaver benefits to 16- and 17-year-olds. From 1 July 2025, those in this age group will become eligible for government contributions. Then, starting 1 April 2026, they’ll also qualify for compulsory employer contributions when working.
This is a great step toward encouraging better saving habits among younger Kiwis and giving them a stronger financial start.
These changes may seem small on the surface, but over time they can have a real impact on your retirement savings. It’s a good time to check in on your KiwiSaver settings—your contribution rate, your fund type, and whether you’re on track to make the most of the government top-up.
If you’re not sure how these changes affect you or whether you’re in the right fund for your goals, we’re here to help.
At Castle Trust Financial Planning, we’re all about making financial advice simple, practical, and tailored to your situation. If you’d like a quick KiwiSaver review or just want to chat about your options, get in touch—no jargon, no pressure, just sensible financial advice.
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