Retirement Savings Gap Widening for Self-Employed Workers

A significant disparity in retirement savings is developing between self-employed individuals and traditional employees in New Zealand. A report titled Improving the Retirement Savings of the Self-Employed, released jointly by the Retirement Commission and accounting firm Hnry, highlights that self-employed workers contribute to KiwiSaver at less than half the rate of their employed counterparts.

The findings reveal that only 44% of self-employed individuals actively contribute to KiwiSaver, contrasted with 78% of employees during the period from April 2024 to March 2025. This shortfall not only affects personal savings but also means that many self-employed individuals are missing out on government contributions. The report indicates that 41% of self-employed KiwiSaver members receive no government support, often due to irregular earnings or low income.

Growing Workforce, Growing Concern

According to Retirement Commissioner Jane Wrightson, the increasing number of self-employed workers poses a significant challenge for retirement savings. “Self-employed New Zealanders make up a growing share of our workforce, yet they are being left behind when it comes to retirement savings,” she stated. This trend raises concerns about the long-term financial security of a segment of the population that is becoming increasingly important to the economy.

The report emphasizes that the self-employed often lack the same resources and knowledge regarding retirement planning that employees may have through their workplaces. Many do not receive the same level of support or guidance about contributing to retirement funds, leading to substantial gaps in savings.

Implications for Policy and Support

The findings have prompted calls for enhanced support for the self-employed to ensure they can effectively plan for their retirement. The Retirement Commission and Hnry suggest that policy changes may be necessary to bridge this gap. Potential solutions include providing targeted information and resources to assist self-employed individuals in understanding their options for retirement savings.

As the self-employed workforce continues to grow, addressing these disparities will be crucial. Creating awareness and facilitating access to retirement savings plans could help ensure that all workers, regardless of their employment status, can secure a financially stable future.

In conclusion, the widening retirement savings gap between self-employed individuals and employees signals a pressing issue that requires immediate attention from policymakers and financial institutions. By fostering a more inclusive approach to retirement savings, New Zealand can work towards safeguarding the financial well-being of all its workers.