With the first step of KiwiSaver contribution increases taking effect on 1 April 2026, new survey results suggest many members are open to contributing more, even as questions remain about the impact on wages and business costs.
From April, the default KiwiSaver contribution rate will increase from 3% to 3.5% for both employees and employers. A further increase to 4% is scheduled for April 2028.
Many members intend to stay or increase contributions
A recent survey commissioned by ANZ Investments found that 34% of respondents plan to remain on the new 3.5% default rate.
Encouragingly, 21% said they would increase their contribution rate above 3.5% if their employer matched the increase.
Only 10% indicated they intend to apply for a temporary reduction back to 3%, while 3% said they expect to request a contribution suspension. Around 22% were unsure what they would do.
ANZ Investments Managing Director Fiona Mackenzie described the findings as encouraging, noting that higher contribution rates can meaningfully improve retirement outcomes over time.
Projections from Te Ara Ahunga Ora Retirement Commission indicate that for someone aged 35 earning around $80,000 per year, moving to a 4% default rate (employee and employer combined) could result in approximately 25% more savings at age 65 compared with current settings.
Employer costs and wage implications
However, the change also raises broader economic considerations.
RNZ highlights that the increase represents an additional employment cost for businesses that structure KiwiSaver as an employer contribution on top of salary.
Some economists suggest that over time, higher compulsory contributions may be reflected in smaller pay increases, particularly in sectors already facing tight margins.
Treasury has previously indicated that a large portion of the increased employer cost could be absorbed through lower-than-otherwise wage growth, though the precise impact will vary between industries and employment agreements.
For employees on total remuneration packages, the higher KiwiSaver rate may effectively come out of their existing pay allocation.
A timely moment for review
With contribution rates changing and economic conditions still evolving, the upcoming April adjustment may prompt many members to reassess their settings.
Members can apply for a temporary reduction back to 3% for up to 12 months if affordability is a concern. Alternatively, some may choose to increase their contribution rate voluntarily.
The shift highlights an important balancing act between short-term affordability and long-term retirement outcomes.
For those unsure how the changes affect them, particularly around contribution rates, employer matching, or overall strategy, speaking with a financial adviser can help clarify options and ensure decisions align with personal goals.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.
