The new financial year is nearly here—and with it come some of the biggest KiwiSaver shifts in years. From April 1, changes triggered by Budget 2025 start flowing through to pay packets, KiwiSaver accounts, and household budgets. Here’s what you need to know about the updates likely to hit your wallet first.

1 April 2026 changes

The default KiwiSaver contribution rate will rise to 3.5% (from 3%) for both employees and their employers. Inland Revenue says this change will affect all pay days from 1 April, so even if your pay period covers both before and after 1 April, your whole contribution for that pay period will be deducted at the new rate.

However, you can apply for a temporary rate reduction from 1 February 2026 if you want to keep contributing at 3%, perhaps because you can’t afford the rate increase or want to save in other ways. This reduction can last from 3 to 12 months, and you can do this as many times as you like. However, your employer can choose to match your temporary rate reduction.

Finance Minister Nicola Willis said at the time of the Budget that, along with helping build greater security in retirement, the increased contribution rate will also help grow the potential deposit for young people looking to buy their first home.

“An increase in KiwiSaver balances will also grow the pool of funds available for investment in New Zealand. KiwiSaver schemes already invest around 40 per cent of their funds in New Zealand-based assets,” she says.

What’s changing for 16 and 17-year-olds?

From 1 April 2026, 16 or 17-year-olds will also qualify for employer KiwiSaver contributions (if they meet the other eligibility requirements).

So, if a 16-year-old starts contributing to KiwiSaver from their wages, their employer will need to contribute too. Before this date, employers only had to contribute for people aged 18 to 65.

What’s already changed?

From 1 July last year, the government contributions to KiwiSaver dropped, falling from 50 cents to 25 cents for every dollar an individual puts into KiwiSaver each year. This reduces the maximum government contribution you can receive to $260.72, from $521.43.

In more good news for 16- and 17-year-olds, they too will be able to benefit from these government contributions from 1 April.

On the flip side, anyone earning over $180,000 of taxable income a year was excluded from government contributions last year.

The government is also working to remove barriers that prevent many farm and other rural workers from using their KiwiSaver accounts to buy their first homes, as others can. A bill to introduce this change is expected in the middle of this year.

What’s changing next?

From 1 April 2028, the default KiwiSaver contribution rate will increase again, rising to 4% (from 3.5%) for both the employee and the employer, as determined by Budget 2025.

However, what happens after this depends on the election later this year. National has been reported in the media indicating that, if elected, they would keep raising contribution rates to 6%.

They would achieve this by increasing the default contribution rate by 0.5% each year from 1 April 2029, so that by 1 April 2032, employers and employees would both be contributing 6%, bringing us to a combined rate of 12% by 2032, closer to what happens in Australia.

However, it's not totally in line with Australia, as the minimum employer contribution there is currently 12% of an employee's gross salary.

It's also likely there will be a more general debate around retirement savings come election time. This will not only focus on contribution levels, but is likely to include whether KiwiSaver should be made mandatory for everyone.

Furthermore, there may be talk about whether the total remuneration for jobs should be considered exclusive of the employer's KiwiSaver contribution. At the moment, the base salary advertised for jobs can include this contribution. But if it were changed, it would mean that a job paying $100,000 would be advertised as such, with KiwiSaver contributions paid on top of that amount. This is a change the Retirement Commission favours.

The coming months will bring more insight into just what the various political parties have in mind in these areas.

Written by: Sonia Speedy

Sonia Speedy has been a journalist for over 20 years, working in newspapers, magazines and radio. She also runs an online platform for parents at familytimes.co.nz. She lives on the Kāpiti Coast with her young family and loves writing stories that help make people's lives easier.