Set up by the government, KiwiSaver is a voluntary savings scheme to help New Zealanders to save for their retirement. Once you’ve joined, you can make voluntary contributions at any time, either directly to your KiwiSaver provider or through Inland Revenue.
You can choose to contribute 3%, 4%, 6%, 8%, or 10% of your gross salary to your KiwiSaver account. Other than your own contributions, there’s an annual KiwiSaver government contribution ($521.43) along with employer contributions (3% of your gross salary).
Your funds are invested on your behalf by the KiwiSaver provider of your choice. If you don’t choose a provider, Inland Revenue will assign you to 1 of the 9 default KiwiSaver schemes.
Who can & how to join
Most New Zealanders under the age of 65 can join KiwiSaver.
You can join KiwiSaver if you are:
- living in New Zealand (with some exceptions)
- a New Zealand citizen or entitled to stay in New Zealand indefinitely
- below the age of eligibility (65) for NZ Super.
To join KiwiSaver, you must:
- already in work — you can choose whether you join KiwiSaver. If you decide to, you can join a scheme provider directly or opt in through your employer.
- starting a new job — if you’re over 18 and eligible, you’ll be automatically enrolled in KiwiSaver. Your employer will give you some information about KiwiSaver. If you have been automatically enrolled, you can choose to opt out of KiwiSaver. The Opt-out request form (KS10) must be completed within 8 weeks of starting your new job. Any contributions you’ve made will be refunded.
- self-employed or not working — you can join KiwiSaver by contacting your chosen scheme provider directly. They’ll send you a product disclosure statement and enrolment form. If you’ve chosen to join KiwiSaver, you can’t opt out. Although you could take a savings suspension (break from contributing for 3-12 months) after 12 months. Read up on choosing your KiwiSaver scheme providers to learn more.
Here are the KiwiSaver benefits:
- KiwiSaver contributions come out of your pay before you see it, which makes saving easier.
- if you’re over 18, you are entitled to:
- an annual contribution paid by the government of up to $521.43
- employer contributions that match 3% of your gross earnings.
- you may be able to use your savings to buy your first home 3 years after your first KiwiSaver contribution. You may also be eligible for the KiwiSaver HomeStart grant from Housing New Zealand.
- your KiwiSaver account moves with you if you change jobs or leave the workforce.
- you can access the funds in your account if you experience hardship.
Whether you’re working, not working, or self employed, making contributions is easy!
If you’re working
Your employer deducts contributions from your before-tax pay at your chosen rate (3%, 4%, 6%, 8% or 10%). The default rate of 3% will be applied if you don’t choose particularly. Your employer passes this money to KiwiSaver, which then pass it on to your scheme provider.
Once you’ve chosen, you must continue using this contribution rate for 3 months before you’re able to change it.
Not working or self-employed
You and your KiwiSaver scheme provider agree how much you want to contribute and you make payments directly to them.
How your contributions are processed
It takes about 3 months for any KiwiSaver contributions deducted from your pay to reach your account. Your contributions, including any interest earned, are transferred to your scheme provider once your employer’s payroll information is verified correct.
Make sure to contact a financial advisor to enquire on:
- whether or not KiwiSaver is right for you
- how to choose a scheme or investment product
- the overall KiwiSaver scheme and its financial concepts
- how to take control of your NZ Super
- your personal financial circumstances.
Now, you don’t have to stop making KiwiSaver contributions if you’re experiencing financial hardship. You can apply for cash loans in New Zealand to make your contributions continuously.
Helping clients all over NZ, Pretty Penny Loans is a specialist in fast cash loans up to $1000. What makes PPL different from others in the industry is not only it’s competitive rates, but it’s quick and easy application process, which means you can get the funds on the same day.
Note: KiwiSaver isn’t guaranteed by the government. This means you make your investment choices in a KiwiSaver scheme at your own risk. However, all KiwiSaver schemes are regulated by the Financial Markets Authority in a similar way to other registered superannuation schemes.