WHAT IS KIWISAVER?
KiwiSaver is a voluntary savings scheme that can help you save for your retirement. In some situations, you may be able to use part of your KiwiSaver funds to help you buy your first home.
If you’re enrolled in KiwiSaver, you grow your savings by making contributions to your KiwiSaver. If you’re a salary or wage earner, your employer will also contribute to your KiwiSaver (unless they’re
already contributing to another superannuation fund for their employees). Depending on how much you’ve contributed to your KiwiSaver, the government may contribute as well.
HOW ARE CONTRIBUTIONS MADE?
For many people, KiwiSaver will be work-based. This means you’ll receive information about KiwiSaver from your employer, and your KiwiSaver contributions will come straight out of your pay.
If you choose to join, contributions are deducted from your pay at the rate of either 3%, 4%, 6%, 8% or 10% (you choose the rate) and invested for you in a KiwiSaver scheme.
If you’re self-employed or not working, you agree with your KiwiSaver provider how much you want to contribute, and make payments directly to them.
BENEFITS YOU WILL RECEIVE BY JOINING KIWISAVER:
3% contribution from your employer
If you’re contributing to a KiwiSaver scheme from your salary or wages, your employer is required to put in a minimum of 3% of your before tax pay* (less employer superannuation contribution tax) if you’re 18 or over. As an employee paying PAYE, you’ll need to contribute at least 3% for at least the first 12 months of membership.
Government Contributions of up to $521.43 every year
For every $1 you put into your KiwiSaver account from 1 July to the following 30 June, the Government will put in 50 cents up to a maximum of $521.43 per year if you’re 18 or over. To get the maximum amount you’ll need to contribute $1,042.86. This is called a Government Contribution. When you join for the first time, Government Contributions will be paid based on the number of days you have been a member in that year.
Did you know: Every year thousands of KiwiSaver members miss out on the Government Contribution?
WHEN YOU CAN USE YOUR FUNDS?
Your KiwiSaver savings will generally by locked in until:
- you’re eligible for NZ Super (currently 65)
- you’ve been a member for at least 5 years (if you joined over the age of 60)
You may be able to make an early withdrawal of part (or all) of your savings if you are:
- buying your first home
- moving overseas permanently
- suffering significant financial hardship
- seriously ill
FIRST HOME WITHDRAWAL
If you’ve never owned a home, and you’ve been a KiwiSaver member or a member of a complying superannuation fund for a combined total of at least three years, you can take out all of the money both you and your employer have put in, as well as all of the investment returns, to help buy your first home (except for $1,000 and any amount you may have transferred from an Australian complying superannuation scheme).
UP TO $10,000 FIRST HOME GRANT
On top of the first home withdrawal, if you’re eligible, you may also receive up to $10,000 as a First Home grant from the Government towards your first home.
YOUR MONEY IS HELD IN TRUST
Whether you are with a big Aussie bank or a New Zealand owned KiwiSaver specialist, the law requires your investments to be held by a licensed supervisor and not the scheme provider. This means you can focus on selecting the fund that’s right for you knowing your investments are being held by an independent supervisor.
OVER 65’S CAN NOW JOIN*
New Zealanders over the age of 65 are able to join KiwiSaver and are not subject to the lock-in period of five years. There are multiple independent KiwiSaver providers in New Zealand, and you can choose which one of them manages the funds in your KiwiSaver. Some providers also offer different types of funds, with different features. The right fund for you will depend on things such as your appetite for risk, and how long you are investing for.