National Plans to Increase KiwiSaver Contributions Ahead of Election

The National Party of New Zealand has announced a pledge to increase the default KiwiSaver contribution rate if it is re-elected in the upcoming 2026 general election. This commitment is the party’s first significant policy statement as the election approaches, with just over a year remaining until voters head to the polls.

In this year’s Budget, the government confirmed an increase in the default KiwiSaver contribution from 3% to 4% by 2028. Speaking to party members in Upper Hutt, National leader Christopher Luxon emphasized that even after these adjustments, KiwiSaver contributions would still fall short compared to Australia’s equivalent retirement savings scheme. He expressed a desire to enhance the financial security of New Zealanders, stating, “For Kiwis working in New Zealand, that means smaller KiwiSaver balances and less financial security than friends or family working and saving in Brisbane, Sydney or Melbourne.”

Luxon outlined a gradual plan to increase the default contribution rates by 0.5% each year until 2032. This would result in both employees and employers contributing 6% each, culminating in a combined rate of 12% by 2032, effectively aligning New Zealand’s scheme with that of Australia.

The National Party estimates that the policy would incur a cost of approximately $90 million annually for each 0.5% increase. Luxon indicated that the funding for this initiative would likely be accommodated within existing departmental budgets, although he acknowledged that some financial resources for cost pressures “could become available for certain agencies.”

Unlike Australia’s system, the KiwiSaver scheme in New Zealand would not be compulsory. This announcement follows the government’s decision to halve its annual contribution to a maximum of $260.72 and to eliminate it for individuals earning over $180,000 annually.

In a statement released earlier today, Luxon asserted that enhancing KiwiSaver would contribute to ensuring New Zealanders are “more financially secure in retirement.” He elaborated, saying, “Financial security for retired people comes through home ownership and supplementing New Zealand Superannuation with long-term savings. KiwiSaver supports both of those, so National will strengthen it further.”

Luxon also highlighted the potential benefits for younger workers, stating that a 21-year-old earning $65,000 annually today could retire with a KiwiSaver balance of around $1.4 million, which is approximately $400,000 more than they would accumulate under the current Budget 2025 contribution settings.

Today’s announcement coincides with the upcoming anniversary of the National Party’s coalition, which marks two years since its establishment. The pledge to enhance KiwiSaver contributions is expected to resonate with voters concerned about retirement security and financial stability in New Zealand.