Strong support for Budget 2025 reforms
New polling by the Financial Services Council (FSC) shows New Zealanders strongly back recent changes to KiwiSaver announced in Budget 2025, underscoring the need for a government-led long-term strategy.
According to the results:
-
62% support extending contribution eligibility to 16-year-olds.
-
59% support lifting the default contribution rate to 4%.
-
47% support restricting government contributions to earners under $180,000.
-
However, 66% oppose halving the government contribution.
FSC chief executive Kirk Hope (pictured) said the findings highlight both engagement and ambition for the future of KiwiSaver.
“KiwiSaver is a success story, with 3.4 million enrolments, over $100 billion in funds and widespread public engagement, it’s time to build on that success,” Hope said. “The government has a real opportunity to launch a national strategy that secures better retirement outcomes and unlocks billions in capital for investment back into New Zealand.”
Budget 2025 framed these KiwiSaver reforms as part of a broader effort to boost savings and investment, with Finance Minister Nicola Willis saying they would “encourage more young people to adopt a savings habit and help them build a deposit for their first home.” Economists, however, cautioned the impact would be modest, with Kiwibank’s Jarrod Kerr noting the changes are “not going to make or break your deposit.”
Views on early withdrawals
The survey also asked Kiwis about early withdrawal rules. There was strong backing for existing exceptions:
-
84% support early withdrawals for first-home purchases.
-
80% support withdrawals for significant financial hardship.
Other proposals received little support, with opposition as follows:
-
75% oppose allowing withdrawals for shares.
-
73% oppose a second home.
-
83% oppose a holiday.
-
60% oppose farm livestock.
-
66% oppose business assets.
-
51% oppose buying a business.
-
45% oppose a farm purchase (already possible under current settings).
“This lack of broad support for any changes to early withdrawal settings show that New Zealanders value KiwiSaver as a retirement savings tool and want it protected and improved,” Hope said.
“A long-term strategy would be the appropriate avenue to raise ideas and policy changes to improve KiwiSaver. This would ensure KiwiSaver continues to serve its purpose while enabling investment into infrastructure, housing, and innovation – benefiting both savers and the economy.”
Call for a national strategy
FSC is now urging the government to take a page from Australia’s playbook.
“Australia took a long-term approach in the 1990s and now has over $4 trillion in superannuation funds,” Hope said. “With the right strategy, KiwiSaver can follow a similar path and grow a resilient system that supports retirement security and national development, whilst also taking the fiscal pressure off the government’s finances.”
The council is calling for collaboration between government and the financial services sector to develop a national KiwiSaver strategy, drawing on both international best practice and local industry expertise.
National strategy key to KiwiSaver’s housing impact
For advisers, KiwiSaver remains central to first-home buyer activity, with strong public backing for withdrawals tied to homeownership. The polling shows clients value KiwiSaver primarily as a retirement tool, but also as a stepping stone into the housing market.
Policy certainty through a national strategy could strengthen borrower confidence, while higher contribution rates and wider eligibility may boost long-term savings – expanding the pool of clients with deposits for property purchases.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
