KiwiSaver is a voluntary scheme that allows New Zealanders to increase their retirement savings by contributing 3%, 4% or 8% of their annual income to a KiwiSaver account.
If you choose to contribute to your KiwiSaver account, your employer must contribute at least 3% of your salary to your KiwiSaver account each year. The government will also help you kickstart your savings by contributing $1,000 to your account. Each year, the government will also contribute a member tax credit of $521 to your account, as long as you are over the age of 18.
KiwiSaver accounts are run by banks and other financial services businesses. They invest your money in term deposits, shares and other investments.
If you’re over the age of 18 and you start a new job and you don’t already have a KiwiSaver account, one will automatically be created for you. You can opt out between two and eight weeks after starting a job. But after that you will need to continue to contribute for 12 months. You can take a contributions holiday after that if you choose to.
KiwiSaver is also a way of helping you to save for a deposit for your first home, through the home deposit subsidy and home purchase withdrawal. But aside from these incentives, you won’t be able to use your KiwiSaver money until you reach the age of 65.