KiwiSaver is changing: what Budget 2025 means for you

Big changes are coming to KiwiSaver, and they could affect how much you save for your first home or retirement.  

Budget 2025 introduced a few key updates. Here’s what you need to know and how to stay on track.  

Default contributions rates are increasing 

The default KiwiSaver contribution rate will rise in two steps: 

  • To 3.5% from 1 April 2026 
  • To 4% from 1 April 2028. 

Employers will also need to match these new default rates, meaning more going into your KiwiSaver account over time.  

If you’d prefer to stick with the current 3% rate, you’ll be able to apply for a temporary rate reduction from 1 February 2026. This exemption can be granted for up to 12 months and reapplied for if needed. 

Government contributions are being cut in half 

From 1 July 2025, the annual Government contribution will drop from 50 cents to 25 cents for every $1 you contribute to your KiwiSaver account between 1 July and 30 June. 

To receive the new maximum ‘bonus’ of $260.72 (previously $521.43), you’ll still need to contribute at least $1,042.86 during each financial year. 

Younger members are included 

From 1 July 2025, 16- and 17-year-olds will become eligible for the Government contribution, provided they meet the usual criteria.  

From 1 April 2026, employers will also be required to contribute to younger workers’ KiwiSaver accounts – giving them a head start on long-term savings.  

High earners will no longer receive Government contributions

If you earn more than $180,000 in taxable income a year, you’ll no longer be eligible for the Government contribution from 1 July 2025. 

Why the changes?

The Government says these changes are designed to balance encouraging long-term saving with making the scheme more financially sustainable.  

What you can do next

  • For younger Kiwis, now could be a great time to consider joining the KiwiSaver scheme. The younger you start investing, the more time your savings have to grow, thanks to the power of compounding.  
  • Check your contribution rate – If you’re already contributing, take a moment to check your contribution rate. Is 4% enough to get you where you want to go?  
  • Review your KiwiSaver fund – Are you in the right fund for your goal, risk profile and time horizon? A quick chat with your Invest Link adviser can help you make sure your money is working as hard as you are.  

We’re here to help

Depending on your situation, the KiwiSaver scheme can be an effective way to grow long-term wealth. But understanding your options matters.  

If you’d like some help navigating the changes, your Invest Link adviser is here to talk things through.  

Disclaimer: The information provided in this article is intended for general informational purposes only and does not constitute financial advice. Every individual’s financial situation is unique, and financial decisions should be made based on your specific circumstances and goals. We recommend consulting with a qualified financial adviser before making any investment, insurance, or mortgage-related decisions. Mortgage Link, Insurance Link, Invest Link, and FG Link are part of the Link Financial Group, offering tailored advice and services to help you achieve your financial goals.