A significant minority of people are making voluntary contributions to their KiwiSaver schemes to take advantage of volatile market conditions, according to research by ASB.
While most people do not pay extra, a total of 29% are paying more than they have to, said ASB senior economist Chris Tennent-Brown.
The news of people paying extra gives a boost to the standing of KiwiSaver, since it follows other research that finds overall balances are lower than they could be because other people are taking contribution holidays during difficult times.
The research could be good news for mortgage advisers whose first-time customers often use their KiwiSaver account for a deposit on a house.
Tennent-Brown said many people were sticking with existing KiwiSaver strategies, which could give them the chance to maximise long-term gains.
“Over the last few volatile months, the number of people switching has remained at normal levels,” Tennant-Brown said.
“This is really pleasing to see and it contrasts with the spike in switching that we saw in the early days of the pandemic in 2020.
“One of the questions I get asked is when markets are volatile, should people stop making contributions and the answer to that is generally no.
“People should continue their regular savings if they can. Furthermore, when markets are down, making lump sum contributions and buying when investment values are low will benefit overall savings when markets recover.”
Tennant-Brown said 29% of people had made additional voluntary contributions to their KiwiSaver, and more than a quarter of those were motivated by a desire to use their scheme to get better returns from the market.
“Whatever the reason, it is good to see people maximising some of the key benefits of KiwiSaver. It is going to help them reach their savings goals and it’s a smart financial thing to do, which is great.”