KiwiSaver

More than a million people will be seeking advice on their KiwiSaver, Harbour Asset Management co-chief executive Andrew Bascand says.

More than a million people will be seeking advice on their KiwiSaver, Harbour Asset Management co-chief executive Andrew Bascand says.

Speaking at the recent launch of the Evidential KiwiSaver scheme, Bascand laid out his forecast for the growth of KiwiSaver.

“The all-consuming wave is well underway.”

“You can’t avoid that KiwiSaver is the future of financial advice in New Zealand.”

“Under the current KiwiSaver settings I think that KiwiSaver goes to just under $400 billion in 10 years’ time.”

(This speech was made before the Budget announcements).

Bascand’s model assumes members over 65 take money out of KiwiSaver, he has used an average contribution rate of 4.3% and salary and wage inflation at 3% annually. His market return is 4.25% after tax.

“I think in all respects my $400 billion here of KiwiSaver is slightly conservative.”

Under this model KiwiSaver goes from being $2 in every $10 of household wealth to $4 in every $10.

Bascand looks to Australia and how superannuation has grown.

One of the trends he expects New Zealand to follow is that an increasing amount of superannuation (KiwiSaver) will move to managed portfolios on platforms.

He reckons 50% of super in Australia sits on platforms and New Zealand is around 25%. New Zealand will grow, maybe not to the same level as Australia, but in his view it will increase.

More and more KiwiSaver members will start seeking advice making it a profitable sector to operate in.

Surveys show 25% of members have sought advice so far, however Bascand questions the data and whether it is true independent financial advice or just information from a provider to a member.

The key takeout is “people are thinking about (advice).”

Based on his $400 billion growth predictions and 25% of members seeking advice that means there will be $60 billion of funds which could come under advice

He notes Australia has been struggling with providing advice as its superannuation has grown. New Zealand will be no different.

“I actually don’t think there are enough advisers in New Zealand to do this today.”

The Government is increasing contribution rates to KiwiSaver, but at the same time reducing, and in some cases, removing the member tax credit.

Key Points:

• Eligibility Extended to 16- and 17-year-olds:
• KiwiSaver Government contributions and employer matching will now be extended to 16- and 17-year-olds. ​
• Default Contribution Rate Increases from 3% to 4% by April 2028. ​
• Government contribution will be removed for KiwiSaver members with taxable income over $180,000 per annum. ​
• The rate of the Government contribution will be halved from $521 to $260.72. ​

The Government has announced in the Budget that the default contribution rate of employee and matching employer KiwiSaver contributions will rise from 3 to 4% of salary and wages, phased in over three years.

However, members will have the choice of remaining on the 3% rate if they choose.

In a move to save the Government money it has announced that the annual Government contribution rate will halve from $521 a year to $260.72.

However, for those earning more than $180,000 a year the contribution will go altogether.

Finance Minister Nicola Willis says the change has been made to ensure the scheme’s costs to the taxpayer remain sustainable.

The KiwiSaver changes are expected to save the Government up to $3 billion over the next four years.

On the positive side the Government has extended the Government contribution, and employer matching, to 16 and 17-year-olds in the workforce. 

Willis says; “Putting these changes together, the KiwiSaver balances of employees contributing at the new 4% default rate will grow faster than they do at the current 3% default rate, providing a larger balance at age 65 and a larger deposit when people use KiwiSaver to buy their first home.

The new 4% default rate will be introduced in two steps. From April 1, 2026 it will go to 3.5% and, from April 1, 2028 it will go to 4%.

Phasing in the increases will help workers and employers plan ahead, she says.

“The Government recognises there will be times when some people do not feel able to contribute a higher proportion of their wages and salaries to KiwiSaver. Therefore, employees will be able to opt to contribute at a lower 3% rate and have that that lower rate matched by their employer. Their contributions will be reset to the default rate after 12 months, but they can opt down again if they wish.

Changes to the government contribution will take effect from July 1 this year. "The changes will not affect the government contribution for the current year, which will be paid out in July and August this year."

Boutique providers have taken out the top spots in Consumer New Zealand’s KiwiSaver survey with Generate awarded People’s Choice.

Boutique providers have taken out the top spots in Consumer New Zealand’s KiwiSaver survey with Generate awarded People’s Choice.

Receiving a satisfaction rating of 80% Generate topped the survey, with customers liking the manager’s ease of access and features of its digital platform.

Milford Asset Management comes in second with 75%. Customers cited strong communication and their confidence in returns as reasons they are happy with their provider. Simplicity rounds out the top three with a 69% satisfaction rating from customers, recognised for its fair fees and ethical focus, the survey finds.

At the other end of the scale, both in size and satisfaction rating, New Zealand’s largest KiwiSaver provider, ANZ, has seen satisfaction fall once again with consistently poor performance on transparency and fees, according to the survey.

The bank comes in 11th out of 13 providers ahead of only Smart and Mercer. The survey finds Smart struggles to engage with and support customers, while Mercer customers shared concerns about the quality of the service and value for money.

KiwiSaver providers must work to maintain trust

Consumer New Zealand says while customers’ satisfaction in their provider is growing, the coming years will be a test of how well providers communicate, amid ongoing global economic uncertainty.

“KiwiSaver customer satisfaction has improved noticeably in 2025,” says Jon Duffy, Consumer New Zealand chief executive.

“The sector’s overall satisfaction rating climbed to 57%, up from 52% in 2024.”

Performance is still the key driver of how satisfied customers are, the survey finds, with recent positive returns behind low switching rates. Customers are still worried about whether they are being charged fair fees, how accessible a KiwiSaver provider’s product is and transparency around where their savings are being invested.

“Ethical investment continues to attract high interest. Many New Zealanders say they care about whether their funds are invested in undesirable sectors, but few know the details of where their money goes,” says Duffy. 

“Many rely on trust in their provider. Around 40–50% believe providers are making genuine efforts to invest ethically, while a similar proportion remains unsure.”

Investment platform Sharesies is turning its mind to how it can work more closely with advisors now it has its latest KiwiSaver scheme options up and running.

Investment platform Sharesies is turning its mind to how it can work more closely with advisors now it has its latest KiwiSaver scheme options up and running.

The company this week began offering its KiwiSaver customers a base fund option with higher risk US exposure, in the form of its Sharesies US500 Fund. The fund invests directly into the Vanguard S&P 500 index fund. Waiting in the wings for launch is a US self-select option allowing customers to add specific companies and ETFs to their portfolio.

“We've got a 9 basis point management fee, which includes the underlying Vanguard cost as well, so it's giving us an entry into that low cost segment of the market that we haven't had before,” says Matt Macpherson, Sharesies GM of Super and Funds. 

With the work to build out the KiwiSaver offering almost complete, Macpherson says further consideration of how the platform can work with advisors is likely going to come up later this year.

“We're really keen to work with advisors.

“At this stage, one thing I think we all know is that there's a lot of informal advice that happens around people's finances, and people are always going to be talking to friends and family and things like that, as well, as, you know, formally through advisors.”

Higher-risk, low cost option rounds out offering

Macpherson says the new options were created as a response to demand from customers wanting access to US exposure.

“It really does kind of complete, I guess, a nice range of options for people to choose from, but also to combine, which we see a lot of.”

Initially asking customers to select just one base fund, Sharesies now allows multiple base funds requiring KiwiSaver members to apportion 50-100%, with the remaining able to be allocated from the self select options.

Macpherson says with the underlying S&P 500 index being 100% equities, investors will need to be thoughtful about how they allocate.

“This is an aggressive fund that comes with a risk indicator of six and we designed this scheme so people can add more than 5%.

“But we see this as being probably used in combination, rather than people putting all of their eggs into the S&P 500.”